Sitting of 6 July 2000

Preamble
The House met at half-past Eleven o'clock
PRAYERS
[MADAM SPEAKER in the Chair]
PRIVATE BUSINESS

  MERSEY TUNNELS BILL (By ORDER)
  Order for Second Reading read.
  To be read a Second time on Thursday 13 July.

Oral Answers to Questions
  EDUCATION AND EMPLOYMENT
  The Secretary of State was asked—
  EDUCATION AND EMPLOYMENT

    Further Education
    Mr. David Ruffley: If he will make a statement on the funding of further education. [127920]
    The Secretary of State for Education and Employment (Mr. David Blunkett): I announced last November that there would be an additional £365 million for the further education sector next year. That is a real-terms increase of 7.7 per cent., the largest single increase that the further education sector has ever received. It will bring the total to £3.9 billion.
    Mr. Ruffley: Is the Secretary of State aware of the grave concern of many FE colleges, including my own, the West Suffolk college in Bury St. Edmunds, which feel badly let down by the performance of the Further Education Funding Council this year? Is the right hon. Gentleman aware that many colleges have not yet even received clear indicative allocations of their basic funding? Is he aware that agreements relating to Learn Direct, adult growth programmes and the standards fund have not yet been completed in advance of the new financial year in August?
    When will the Secretary of State get a grip? Will he undertake to make sure that the Learning and Skills Council that is to take over from the FEFC performs better and behaves in an efficient manner, so that FE colleges are not subjected to the delays and confusion which are marring further education at present?
    Mr. Blunkett: I shall certainly make sure that the Learning and Skills Council acts effectively to pull together the further education and training and enterprise funding and to deliver it with high quality and effective management. We are pleased that Bryan Sanderson has
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    agreed to be the chair of the new Learning and Skills Council and that Nick Reilly, the managing director of Vauxhall, has agreed to be the new chairman of the adult learning inspectorate. I am certain that, between them, they will ensure that the quality and improvements that we seek will be achieved. If there is a particular problem at Bury St. Edmunds, I shall be happy to look into it with my colleagues and to make sure that the college gets the information that it needs.
    Mr. Barry Sheerman: May I inform my right hon. Friend that many of the FE colleges that I visit as Chairman of the Select Committee tell me that the Government have indeed got a grip on funding? There are still some complaints about efficiency savings and the need to find another 1 per cent. this year to pay for the pay rises, so it is not all sweetness and light in the FE sector, but there is a widespread feeling that we are moving in the right direction. I rarely agree with the hon. Member for Bury St. Edmunds (Mr. Ruffley), but is my right hon. Friend aware that serious concern has been expressed about the running of the FEFC? I, too, welcome the appointment of Bryan Sanderson and, perhaps, the start of a new page in the history of further education, which the Government have initiated.
    Mr. Blunkett: We have had a proud record of avoiding some of the difficulties inherent in parts of the private sector with regard to training in further education, but as my hon. Friend knows, we have taken draconian steps to tackle inefficiency and the quality of provision in colleges. We are pleased that this year we have managed to get 45 colleges out of category C in relation to their financial management. That is an important achievement, but there is much still to do. That is why we have been rigorous in tackling failure wherever it occurs.
    Mr. Tim Boswell: Although any increase in funding is welcome—provided that it is a real increase, not a smoke-and-mirrors type of increase—there is still concern in further education colleges because they cannot pay lecturers competitive rates, particularly in market-related sectors such as business and computing. It is extremely difficult for them to recruit and deliver in those areas. Can the Secretary of State explain to the House why, despite his claims to have a grip on the situation, and his projections of a rapid increase of 700,000 in further education enrolments over two years, the actual turnout can best be described as flat-lining on a base, and is in fact genteelly declining under his stewardship?
    Mr. Blunkett: It was the Conservatives who did away with demand-led expenditure, which led to a dramatic fall in the number of students recruited to further education. We have—we make no apology for this—combed out the inappropriate franchising, which led to what can only be described as a complete fiddle of the numbers in further education. The 1 per cent. drop in full-time equivalent students will be reversed as we put £240 million next year into improving and increasing access.
    The measure of what we are doing is our commitment to the standards taskforce agenda, which is about a massive expansion in the sector, but also underlining it with quality. We have a challenge: to meet the skills needs of tomorrow. When I speak this afternoon at the skills

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    festival in Birmingham, I shall underpin that by giving a clear commitment to the expansion and status of vocational education, including the introduction of a vocational GCSE.
    Mr. Ian Pearson: I welcome the extra funding for further education, which is widening opportunities and participation, but will my right hon. Friend consider a quid pro quo: removing the cap on student numbers at some of our best universities providing that they agree to increased participation by those from socially disadvantaged backgrounds?
    Mr. Blunkett: We are involved with the Higher Education Funding Council in the direction of resources for next year, particularly the additional cash that will be available specifically for improving access. I welcome the steps that have been taken by Mansfield college in Oxford, and others, and we are keen specifically to target further education, tertiary and sixth form colleges, a neglected area in terms of university access, to ensure that their best students can be recruited to those universities.

    Selection
    Mr. Christopher Chope: What his policy is on selection in schools. [127921]
    The Parliamentary Under-Secretary of State for Education and Employment (Jacqui Smith): It is a matter for local parents to decide whether or not local grammar schools continue to use selective admissions. The admissions code of practice gives schools guidance on other issues and it is for the schools adjudicator to resolve disputes where they arise, including on issues of partial selection.
    Mr. Chope: That is not a very satisfactory answer from the Minister. Why is it the Government's policy to force popular schools to select pupils on the basis of whether their parents can afford to move into their catchment area? That is one of the most pernicious aspects of the Government's selection policy. Would it not be much fairer to allow school boards to decide for themselves their own admissions criteria?
    Jacqui Smith: There we have an outrider for the Leader of the Opposition's speech this week, asking us to create a sort of free-for-all in admissions policies—presumably that would be what the Opposition wants—which would presumably also apply to primary schools, whose governing bodies would also have the right to select. Are we now to see the nightmare vision of primary moderns in our system—not just a return to the 11-plus, but a 4-plus for our children?
    Mr. Christopher Leslie: Is my hon. Friend aware that, following the interview by the shadow Education Secretary on Channel 4's "Powerhouse" yesterday, many schools in my constituency are extremely worried, particularly primary schools, that they will have to consider selection by academic ability, and that many
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    of them will be left as part of a second-rate tier of schools? What on earth can we do to avoid that threat posed by the Conservative proposals?
    Jacqui Smith: My hon. Friend raises a matter of considerable concern among parents. It is important that we continue with the planned situation, which gives parents the chance, where possible, to choose, but also, through the admissions forum, provides much more certainty about what will happen. The key point about our proposals, by contrast with those of the Opposition, is that it is not possible to allow both parents and schools to choose. Our emphasis is that, wherever possible, parents need to be able to express a preference, not that schools should have the right to weed out children whom they do not want, thereby depriving parents of their choices.
    Mr. John Bercow: Given that the hon. Lady is in review mode, will she confirm one thing that she will not do and three things that she will? Will she promise to do nothing to make it easier to abolish a grammar school, promise to limit petitions to one every five years, promise to allow grammar school parents the right to vote in all ballots, and promise to adopt the Conservative policy of making every school a free school—free to select its pupils, free to choose its term times, free to manage its budget, free to arrange its transport, free to enforce its discipline and free to run its own affairs?
    Jacqui Smith: I think that I lost count of the questions as we went through them. The key matter is that we made it clear that, where grammar schools exist, parents will decide the future of their selective admission arrangements. We have extensively debated concerns about balloting arrangements. We have no plans to review the threshold. We have no plans to take away the right of parents to decide on the future of selective admission arrangements, which is what the Opposition's proposals would do.

    Access Funds
    Mr. Paul Goggins: If he will make a statement on access funds in further education. [127922]
    The Parliamentary Under-Secretary of State for Education and Employment (Mr. Malcolm Wicks): Access funds provide help with transport, course and living costs. They are available to students of 16 and over in schools and colleges. Access funds have been increased from £9 million in 1997–98 to £63 million this year.
    Mr. Goggins: I thank my hon. Friend for his answer. At City college, Manchester, where I am a member of the governing body, access funds increased from £96,000 two years ago to more than £700,000 in the current year. I warmly welcome the Government's strong commitment to extending student support and widening participation; but what action is my hon. Friend taking to ensure that further education colleges are held firmly to account for the way in which they distribute the new funds?
    Mr. Wicks: That is an important point. As the fund increases, we need to be rigorous about its allocation.

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    The National Audit Office has considered arrangements centrally and has found them to be acceptable. Our departmental auditors are working with the Further Education Funding Council to ensure that arrangements for managing and allocating funds at college level—considerable funds, now—are robust. As with any social security system, if I may put it that way, we must ensure that those in need get these funds and not those who know how to work the system.
    Miss Anne McIntosh: Does the Minister share my concern at the cut in Government spending on further and higher education by removing student grants? Will he apologise to those students who are now not able to go into further and higher education? Will he apologise also for failing to meet the Government's pledge of increasing expenditure on education as a proportion of GDP?
    Mr. Wicks: I would share the hon. Lady's concern if for one moment what she suggests were true. We are proud that we have introduced record funding for further education and extra funding for university education. It is important in both sectors that we enable more of our young people, and older citizens, too, to benefit from further and higher education, and that we do not sacrifice quality when we go for quantity. That is what we are doing, and that is our policy.

    Foundation Degrees
    Mr. Keith Darvill: If he will make a statement on foundation degrees. [127923]
    The Parliamentary Under-Secretary of State for Education and Employment (Mr. Malcolm Wicks): Foundation degrees will offer a new vocationally focused route into higher education and employment. They will equip students with the specialist technical knowledge and employability skills needed in our new economy and contribute to wider participation by attracting many people who do not enter higher education.
    Mr. Darvill: I am grateful for that reply. Does my hon. Friend agree that foundation degrees provide an excellent opportunity to link higher education and employers more effectively so that we can meet the new high levels of skills needs? Does he agree also that it is typical of the Opposition's contempt for vocational learning that they oppose foundation degrees?
    Mr. Wicks: One of the great challenges for the Government is achieving a better interface and overlap between the academic and the vocational. The foundation degree is part of that strategy. The skills taskforce has told us that we are short of people at associate professional and technician level. The foundation degree will be an attractive route for many people, some of whom will have completed modern apprenticeships to get into university.
    Mr. Phil Willis: We strongly support the foundation degree principle and its vocational basis. There is a niche in the market for such a degree. However, there is an inconsistency in the Government's thinking, in that the funding will be provided by the Higher Education Funding Council rather
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    than the Learning and Skills Council. Is it not a slight on our further education colleges that they cannot bid directly to run foundation degrees, which would form part of their core market? The ability to bid directly would be preferable to depending on crumbs from the rich man's table to deliver the programmes. When the Minister and the Secretary of State attend the festival in Birmingham today, will they review the position and try to ensure that there is a seamless progression between further education and higher education, to avoid creating needless barriers?
    Mr. Wicks: As the hon. Gentleman knows, many further education institutions provide higher education through partnerships with universities. We expect them to play a role in future. The hon. Gentleman also knows that we are keen to establish close links between the university sector nationally and the new Learning and Skills Council. We shall do that. Even more importantly, we need to build on relationships between universities and the wider community. That means close links with local learning and skills councils.

    Specialist Schools
    Mrs. Betty Williams: What plans the Government have to extend the specialist schools programme. [127924]
    The Secretary of State for Education and Employment (Mr. David Blunkett): With the additional 55 specialist schools that were announced on 20 June, there will be a total of 534 such schools by September. That compares with the 181 specialist schools that we inherited in 1997. We have, of course, altered the funding to ensure collaboration with the cluster of schools in the area, and developed the programme so that it reaches out into the local community.
    Mrs. Williams: I thank my right hon. Friend for that answer. In view of proposals that the Conservative party recently announced, will my right hon. Friend tell the House whether he believes that it is sensible or indeed possible to expand specialist schools without granting them targeted extra resources?
    Mr. Blunkett: Specialist schools have specific additional resources to share with neighbouring schools and to develop the core specialism on which their designation is based. If Conservative party proposals were adopted—bearing in mind that half the resources they mentioned involved double counting—and we did away with the standards fund and specific resources, we would not be able to fund and match-fund the specialist school programme. As with much else that was announced on Tuesday, Conservative policy would unravel a programme that has been highly successful in raising the standard and quality of education in schools, and in contributing to the education programme in their communities.
    Mr. Patrick McLoughlin: The Secretary of State talks about opportunity for all; what has he to say to people who do not live in an area that has a specialist school?
    Mr. Blunkett: I say that, with collaboration, including the use of information and communication technology,

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    we are now able—and when we reach our target of 800 specialist schools in the next three years, will be even better able—to ensure that those schools reach out and provide the additional specialism in the locality where it is needed. For example, we are developing the sports college programme. Sports co-ordinators, who will work with primary and secondary schools in an area, will be attached to it to provide not only a targeted specialism, but the ability to draw in the wider community of schools and the neighbourhood, thus enabling them to develop and enjoy expertise.
    Charlotte Atkins: Is my right hon. Friend aware of the considerable success of Clough Hall technology school, which he visited some years ago, in my constituency? It has been successful not only in exam results but in other ways. I welcome the different approach to specialist schools that the Government have adopted. It means that each school has to share its resources with the community and with other schools. That contrasts with the previous Government's approach, which meant that every specialist school could take all the resources for itself, without sharing them with the community. The new approach has meant that Clough Hall shares resources with Maryhill high school, with the community, and with after-school clubs.
    Will my right hon. Friend consider joint approaches by individual schools in regard to the according of specialist status? This sharing approach—
    Mr. Deputy Speaker (Sir Alan Haselhurst): Order. The hon. Lady is supposed to be asking a question, not making a speech.
    Mr. Blunkett: We are happy to consider joint approaches. In fact, we have already done so, and were pleased to announce not only the joining of schools that have faced particular challenges, but the joining of schools with different emphases. There is, for instance, an interesting joint proposal for specialist status from a grammar school and a secondary modern, which will unite their endeavours to raise standards rather than divide both schools and pupils.
    Mrs. Theresa May: Yet again, the Government are changing their line on free schools. We have had spin line number five, six or seven from the Secretary of State today. The only double counting on education funding comes from this Government, who claimed that there was an extra £19 billion for schools when there was less than £6 billion.
    Does the Secretary of State accept that last year the average percentage of pupils gaining five or more GCSE grades between A and C in specialist schools improved by two thirds as much again as in other schools? Does he also accept that, of the top 100 schools in terms of GCSE results, nearly half were former grant-maintained schools and about a quarter more were church schools?
    Mr. Blunkett: Of course I accept the statistics about specialist schools. With the London school of economics and Leeds university, we sponsored the research that the hon. Lady has used. We are pleased about what has happened, because we have emphasised the need to build the confidence of teachers, and that of schools generally,
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    in their ability to concentrate on and subsequently develop from a specialism. That is why we are dramatically increasing the number of specialist schools.
    Let me say how pleased I am that the hon. Lady has made it here this morning. Given the bruising that she got on Tuesday's "Newsnight", and the complaint submitted by her party to the BBC that she cannot really take it, I feared that she would not turn up.
    Mrs. May: The real problem is that this Government cannot take the truth of what they are doing in education. Specialisation—a separate ethos, and freedom for schools—has been shown to raise standards to the benefit of children. Today, we see the head of a rural primary school taking a £10,000 pay cut to become a lorry driver, because he is fed up with the mountain of bureaucracy. Should not the lorry be taking away the paperwork, not the head teacher? Is it not time that the Government got off the back of schools, trusted teachers and parents, and set schools free to raise standards?
    Mr. Blunkett: Under the proposals announced by the Leader of the Opposition on Tuesday, all head teachers would have to become drivers, because under those proposals the transport provided by their authorities would be withdrawn.

    Literacy and Numeracy
    Mr. David Watts: What steps the Government have taken to improve standards of literacy and numeracy in schools. [127925]
    The Parliamentary Under-Secretary of State for Education and Employment (Jacqui Smith): The national literacy and numeracy strategies, supported this year by funding of £200 million, have transformed the quality of teaching, and raised standards in primary schools. In the 1999 key stage 2 tests, the number of 11-year-olds achieving the expected level for their age increased by six percentage points for English, and by 10 percentage points for mathematics.
    Mr. Watts: The Government's initiative in St. Helens is improving the level of attainment of most children, and is very welcome. What does my hon. Friend think would happen if we implemented the Tories' proposals, and sacked all those involved in that important initiative?
    Jacqui Smith: I, too, congratulate both the teachers and the support staff who have been involved in the raising of standards in St. Helens.
    My hon. Friend has raised an important point. Much of the success of the national literacy and numeracy strategies has been due to local support from experts in training, and teachers who have been able to promote the better teaching of reading, writing and mathematics. They have been funded through the standards fund, which was described by the Leader of the Opposition as "a gimmicky grant." I do not think that those children or the parents who are benefiting from the higher standards in our schools think that it is gimmicky to support local

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    education authorities and schools to teach our children to read, to write and to add up better than they did under the previous Government.
    Mr. George Stevenson: Will my hon. Friend join me in congratulating the head, the staff, the pupils and the parents at Western Coyney infants school in my constituency, which has just been awarded beacon status? They have an excellent record on literacy and numeracy. Is not that award even more commendable owing to the fact that the school does not select its pupils and is in the middle of one of the most socially and economically deprived areas in my constituency? Does it not show the success and determination of the Government in raising standards?
    Jacqui Smith: I certainly join my hon. Friend in congratulating the teachers, the children and the governors at that school, because it is clear that the standards that we are seeing in literacy and numeracy have been achieved because of the commitment and enthusiasm of teachers and of those who support them in LEAs, and by the Government's commitment to ensuring that we raise standards. The work has been done at school level and many congratulations are due to those who have done it.

    Computers for Teachers
    Mr. David Amess: What recent representations he has received about computers for teachers. [127926]
    The Parliamentary Under-Secretary of State for Education and Employment (Mr. Michael Wills): We have received a significant number of representations about late payment of claims and many thank-your for the scheme, the first ever to give teachers real help to buy a computer for their own use. However, all delays are a matter of regret. As soon as I became aware that delays were taking place, we took urgent action to remove them. More than 90 per cent. of eligible claims have now been paid. The remainder will be paid in the next few days, subject only to their eligibility.
    Mr. Amess: Will the Minister now admit that the computers for schools scheme has been incompetently managed? Will he explain to my constituent, Mrs. Day, who is one of the 10 per cent. of teachers who took up the scheme, how £15 can adequately compensate her for her wait, which was five months, and for the money that she had to borrow to pay her child's university tuition fees? How much has the scheme cost? How many £15 compensation payments will he make? Will he reassure the House that the new assessment scheme, which has been taken up by 80 per cent. of teachers, will not be incompetently managed?
    Mr. Wills: I can assure the hon. Gentleman on all those points. May I go through them one by one? If he had read his correspondence, he would have the answers to most of his questions already. As he well knows, as soon as the matter was brought to my personal attention, I acted on behalf of his constituents. If he goes back to the correspondence and reads it, he will receive the answers to a lot of his questions.
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    I repeat our regret that there have been delays, but we have got a grip on the problem—there are no further delays. In answer to the hon. Gentleman's question about the number of payments, we are not yet in a position to tell him that. [Interruption.] The reason why we are not yet in a position to answer that question is simply that the priority, as I am sure he will agree, is to get the small minority of remaining claims paid.
    I ask Conservative Members to bear one thing in mind: it is the first ever such scheme. If I were a teacher, I would far rather wait a few weeks to get £500 from a Labour Government than 18 years to get absolutely nothing from a Tory Government.

    New Deal (Over-50s)
    Ms Hazel Blears: What assessment he has made of the effectiveness of new deal pilot schemes for people aged over 50 years. [127927]
    The Parliamentary Under-Secretary of State for Education and Employment (Ms Margaret Hodge): New deal 50-plus was widely welcomed in the nine pilot areas. A total of 1,050 people were helped into work through the package of support that it offered. More detailed evaluation findings will be published from later this month. As my hon. Friend knows, the Prime Minister launched the programme nationally in April.
    Ms Blears: I thank my hon. Friend for that reply. Is she aware that, in the Manchester and Salford city pride new deal area, we have got more than 200 people into work in the past six months? They include Mary, who had not worked for 13 years, who got a job as a sales assistant at Boots the Chemists, and whose life has changed dramatically—she has made new friends and is earning a decent income for the first time in years; and George, who is now a manager on £30,000 a year in Manchester through the new deal programme. Those opportunities would be destroyed by the Conservative party.
    We must be aware, however, that many people over 50 need extra help to get into work. Will the Government ensure that the extra support for young people to prepare them for work will also be available to people over 50 who want the chance of a fresh start and hope for the future with the Labour Government?
    Ms Hodge: The answer to the second part of my hon. Friend's question is a simple yes, we are aware of the additional requirements. The answer to the first part of the question is that I congratulate those of her constituents who have successfully found work. Since the scheme went national, every week so far, 600 people over 50 on voluntary schemes have been helped into work by the new deal 50-plus.
    Mr. Desmond Swayne: Given that there are just short of 3 million people over 50 but under retirement age who are not working, half of whom have not worked for five years, why have the Government

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    skewed their policy frivolously to waste resources on the new deal to so little effect, while that cohort have been denied the resources that they require?
    Ms Hodge: It is an outrage for a Conservative Member to dare to stand in the Chamber and talk about the number of over-50s out of work. In the 20 years before we came into government, the number of over-50s in work decreased from 84 per cent, in about 1979, to 66 per cent. when we came into office. That was the legacy that we inherited. The sums that we are spending on adults in the new deal overall are similar to those that we are spending on young people. We do not want to consign anyone to the dustbin of unemployment.

    Small Schools
    Mr. Michael Clapham: If he will make a statement on the small schools support fund. [127928]
    The Parliamentary Under-Secretary of State for Education and Employment (Ms Margaret Hodge): We are spending £40 million on the small schools support fund from September 2000 to 31 March 2001. We want to encourage schools to pilot new ways of working with others. I hope that the pilots will benefit schools in two ways: first, to help them to identify more efficient and cost-effective ways of working, through sharing and collaborating with others; and secondly, to raise their standards even further.
    Mr. Clapham: I thank my hon. Friend for that answer. She will be aware that between 1993 and 1997, during the Tory Administration, 450 schools closed. In my constituency, that affected the four villages of Hood Green, Hazel Head, Crane Moor and Crow Edge. Can she say how the new support system for small schools will halt the Tory trend of closing rural schools, and what types of benefits that support will bring back to the rural community?
    Ms Hodge: This Government have reduced the closure rate for rural schools from 30 to four each year. We have done that by investing in and deliberately supporting rural schools in their efforts to stay open. In my hon. Friend's local education authority, if not in his constituency, 37 nursery, primary, special and secondary schools and referral units will be supported by the small schools budget. It is up to them to find the most appropriate way of maintaining themselves, whether that is through information technology, additional staff development or the sharing of facilities.

    Access to Higher Education
    Helen Jones: What steps he is taking to improve access to higher education for students from lower socio-economic groups; and if he will make a statement. [127929]
    The Parliamentary Under-Secretary of State for Education and Employment (Mr. Malcolm Wicks): Our concern is clear: all those who have ability should have access to universities, including the top ones. We are tackling that in a number of ways. Through the Higher
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    Education Funding Council, for example, we are providing £24 million in respect of students from disadvantaged backgrounds, which recognises the extra work in recruiting and retaining students from that group. The Higher Education Funding Council will be developing that work.
    Helen Jones: I am grateful to my hon. Friend for that reply. Does he agree that as almost 66 per cent. of students who achieve three grade As at A-level come from schools in the state sector, it is time that some of our leading universities looked seriously at the way in which they set out to attract those youngsters, and at their admissions procedures, to ensure that they are fair and really based on merit, rather than on the schools that people went to. Does he agree that it is scandalous for the Opposition to defend the privileges of the few rather than ensuring that all our youngsters have a proper chance to develop their full potential?
    Mr. Wicks: We should certainly acknowledge the fact that many comprehensive schools now enable very bright youngsters to get first-class A-level results, and we should pay tribute to the comprehensive system. We are now working with universities, including Oxford university, through summer schools and the rest, to ensure that children from disadvantaged backgrounds have access to university. As for the Opposition, by their interests they shall be judged. Today they have spoken about selection, grammar schools and elitism. Our interests are rather different. We are concerned with all children, all schools and fair access to universities.
    Mr. Nick St. Aubyn: It was the Chancellor of the Exchequer who spoke about elitism in universities. That was his obsession and no one else's. What has the Minister to say about the evidence that the vice-chancellor of Oxford university gave the Select Committee on Education and Employment yesterday, when he said that the Chancellor's attack was ill informed and might have damaged Oxford's efforts to attract the greatest possible number of the brightest and best, wherever they come from?
    Mr. Wicks: Oxford university's own working paper on the subject many months ago recognised the problem that, for different reasons, many able boys and girls from state schools, who have good A-levels, are not getting into our top universities. Now, instead of just having a row about it, we must move on to remedy the situation, and that is what we are doing. I predict that in future more able boys and girls from state schools will go to our top universities. That will be the test, and I am confident that we will succeed.
    Valerie Davey: Does my hon. Friend agree that the Chancellor's introduction of education maintenance allowances for 16 to 18-year-olds will probably be the best legacy of this Government's first term, as it will enable more young people from lower socio-economic groups to get into university? Will the Department encourage the Treasury to extend that scheme universally?
    Mr. Wicks: Yes. We thank the Chancellor for many things, not least for funding the education maintenance

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    allowance schemes. The schemes are already successful and more people from disadvantaged backgrounds are staying on in further education after the age of 16. That will help us to ensure that those bright boys and girls have a fair chance of getting into university. We are motivated by the values of equality; the lot opposite are more concerned about elitism.
    Dr. Evan Harris: Is the Minister aware of evidence given to the Select Committee by the Universities and Colleges Admission Service, the Higher Education Funding Council, the Sutton trust, the Independent Schools Association and universities, suggesting that a barrier that prevents people from less well represented areas and poorer backgrounds from applying to universities is fear of debt? Can he explain to the House how the removal of maintenance grants from the poorest students helps them to access higher education? Is not the student support scheme that he introduced making students from poorer backgrounds still poorer, and will that not be the legacy of this Government that people remember?
    Mr. Wicks: I think that the answer to that long question is no. We are introducing opportunity bursaries so that students from poor backgrounds have an opportunity to go to university; 40 per cent. of university students do not pay tuition fees, and the number will increase. The student finance system is fair. We are increasing the number of our young people who go to university, while maintaining quality. Under the previous Administration, unit funding per student declined. We will not tolerate that. We are maintaining quality as well as quantity. There was a time when the Liberal party attacked elitism rather than defending it.

    Plessington Catholic High School
    Mr. Ben Chapman: If he will make a statement on the community learning centre being established at Plessington catholic high school technology college. [127930]
    The Parliamentary Under-Secretary of State for Education and Employment (Jacqui Smith): Plessington Catholic high school will become a beacon school in September 2000. It has submitted an expression of interest under the Government's ICT learning centres initiative. The Government office for the north west will work with the school and give it a preliminary assessment by the end of July, so that it can work up a full application by 6 October 2000.
    Mr. Chapman: Does my hon. Friend agree that schools such as Plessington have high standards in information technology and communication skills, which can help materially in raising standards? Will she join me in congratulating Plessington on the work it is doing in the context of the community learning sector, in partnership with business, to make those skills and technologies available to people who would not previously have had access to them?
    Jacqui Smith: Yes; I am especially pleased that Plessington school will benefit from the beacon schools initiative, which will give it some £32,000 a year on
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    average to share its expertise, which lies especially in using information and communication technology to improve learning, and will also give it the opportunity—as my hon. Friend points out—to work imaginatively with local businesses to ensure that they can deliver locally the national objective of sharing good practice between schools and opening up opportunities in our communities through the use of information and communication technology, for the widest possible learning to take place.

    Class Sizes
    Mr. James Gray: If he will make a statement on the average size of secondary school classes. [127931]
    The Parliamentary Under-Secretary of State for Education and Employment (Jacqui Smith): The average size of classes in secondary schools is 22.0—[HON. MEMBERS: "That is 22."]—about five lower than in primary schools. If head teachers spent the extra funding that they received in the Budget on teachers, the pupil-teacher ratio could be reduced by 0.4. In addition, since January 1998 we have already reduced by 300,000 the number of children in infant classes of more than 30 pupils.
    Mr. Gray: Will the Minister join me in congratulating the excellent Wootton Bassett comprehensive school in my constituency, which came top of the A-level league tables last year, and is just about to start a new PFI scheme for a new school, brought in by the Conservative-controlled Wiltshire county council? Will she also admit to an error in her answer? The average class size today is 22.02, not 22.0, as she said. The figure of 22.0 applied last year. Will she agree that that compares disgracefully with the 21.66 average class size when the Government came to power? They committed themselves to reducing the average class size, but it has gone up, which is making it more difficult for ordinary comprehensive schools across England to compete with Wootton Bassett.
    Jacqui Smith: I am always willing to congratulate schools on achieving high standards, and I am willing to do so today—but the hon. Gentleman is wrong. Average class sizes have fallen and primary class sizes have fallen, but there has been a 0.1 per cent. increase in secondary class sizes in the past year. That is a trend that has been going on since 1988. As I have already pointed out, we are delivering on our pledge, which was to reduce class sizes for five, six and seven-year-olds—a pledge that means 12,000 additional places in popular schools and £5.8 million for Wiltshire to support that initiative. We said that we would do that, and we are delivering.
    Of course, the situation in secondary schools is slightly different. Head teachers should be allowed to use the extra money that we are putting into secondary schools and decide how they organise their classes. I am sure that if he visits secondary and primary schools, the hon. Gentleman understands that. We pledged to reduce primary class sizes and we are doing that—and we are reducing class sizes overall as well.
    Mr. James Clappison: Would not the class size pledge have been seen in a different light in 1997 if it had been known that while some class sizes

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    would go down, others would go up? Is not the plain fact—irrespective of the Minister's selective use of statistics—that class sizes today are higher for seven to 11-year-olds, and for secondary schoolchildren, than they were in 1997? If we include all schools, as we were invited to do by the Under-Secretary of State, the hon. Member for Croydon, North (Mr. Wicks), the pupil-teacher ratio is the same as it was in 1997. In three years the Government have delivered nothing. We have had three years of all spin and no substance. If we look at the whole picture, we see that the Government have failed to deliver.
    Jacqui Smith: The hon. Gentleman is wrong. In the past year, average class sizes have fallen for key stages 1 and 2, in primary schools, and overall. We have to judge the matter in the light of the Leader of the Opposition's pledge to do away with other "gimmicky" money—the money that we are putting in to reduce class sizes for children aged five, six and seven. We said at the election that we would do that, and we are delivering on that pledge. The Tories would take that money away if they ever got into power.

    New Deal
    Mr. Graham Brady: What assessment he has made of the effectiveness of the new deal programme. [127932]
    The Minister for Employment, Welfare to Work and Equal Opportunities (Ms Tessa Jowell): The new deal is one of the most comprehensively evaluated programmes ever. We have used the evidence to help us develop our strategy for continuously improving the new deal, and to build on its success still further. I announced further measures to achieve that earlier this week.
    Mr. Brady: I thank the Minister for her reply, light on detail though it was. She will recall that she told the Select Committee on Education and Employment on 17 May that the new deal for young people had so far cost the taxpayer £611 million. She said that that equated to a cost of just under £4,000 per job created. Will she confirm that she arrived at that figure only by including some jobs that lasted for less than a day, and others that lasted for less than 13 weeks? Did she not also include jobs that are subsidised, and choose to disregard the Government's own estimate that 60 per cent. of people going into jobs through the new deal would have got those jobs in any case?
    Taking all those matters into account, will she confirm that the true figure is closer to £11,000 per sustained, unsubsidised job? Will she at least accept that the true cost is much higher than £4,000 per job, if the 60 per cent. dead weight is taken into account?
    Ms Jowell: I would like to offer the hon. Gentleman one of the numeracy classes that we announced this week would be available for young people entering the new deal. The Tories seem to have taken an incomplete lesson from Mark Twain, who said:
    Get your facts first, and then you can distort them as you please.
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    What are the facts about the new deal? It is a fact that by any measure, unemployment has fallen among young people and older people, with the greatest fall among the new deal client group. It is a fact that the independent National Institute of Economic and Social Research showed that the new deal has had a significant and positive impact on youth unemployment, and is close to being self-financing. It is a fact that the new deal would not exist under a Tory Government. The Tories do not want a better new deal—they want no new deal for young people.

    Literacy Tests
    Fiona Mactaggart: If he will make a statement on progress towards his target of 80 per cent. of pupils achieving level 4 in literacy tests at key stage 2. [127933]
    The Secretary of State for Education and Employment (Mr. David Blunkett): We inherited a situation in which 56 per cent. of 11-year-olds had reached the acceptable level of ability at reading and writing. Last year, we achieved 71 per cent. of children reaching level 4 at that age. We were very pleased to find an even bigger increase in the reading skills of youngsters of that age.
    We face a problem with writing skills, which I highlighted when the statistics were announced last September. We have set about that problem this year, and have recruited the help of a range of outside organisations and individuals—including the poet laureate—to inspire and encourage young people to learn to write more effectively.
    Fiona Mactaggart: I thank my right hon. Friend for that reply, and invite him to join me in congratulating the pupils and teachers of Slough. Just after I was elected, only 58 per cent. of children there were reaching level 4 and above at key stage 2, but last year the proportion had risen to 68 per cent. I am confident that the figure will continue to improve in the coming year.
    My right hon. Friend identified the teaching of writing, which has also been identified in a recent Ofsted report. It is clear that our focus on reading, given the national year of reading and the energy put into reading in the literacy hour, has delivered results, and we must focus on improving the teaching of writing. The Leader of the Opposition announced plans to cut—among all the other cuts—the number of those who are responsible for training primary teachers to deliver the teaching of writing and the literacy hour. If such a policy were implemented, could the ambitious plans to improve the quality of the teaching of writing in primary schools be delivered? If we got rid of those trainers, would we be able to reach the target—
    Mr. Deputy Speaker (Sir Alan Haselhurst): Order. The hon. Lady is making a speech. We have heard the question.
    Mr. Blunkett: I congratulate the heads and teachers working so hard with pupils in Slough, and hope that we see substantial further improvement in the youngsters' results from the end of May. This year, through the standards fund, we are putting £200 million into the

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    literacy and numeracy programmes. That involves the employment of 300 co-ordinators throughout the country, working with schools on the programme and reinforcing the use of phonics, grammar and spelling. If those resources, those co-ordinators and that work with the schools were to be withdrawn, the Conservatives would take us back to the position we inherited in 1997. The previous Government evangelised and pleaded, but they did nothing to raise standards.
    Mr. David Tredinnick: Will the Secretary of State admit that the rate of improvement has been no greater during the Government's term of office than it was under the previous Government? [HON. MEMBERS: "Not true."] By how much have literacy standards at key stage 3 improved over the past two years, and by how much did they improve in the previous two years?
    Mr. Blunkett: I have just spelled out that there was a 15-point improvement in literacy, from 56 to 71 per cent. I do not recall the exact figures for the years between 1994 and 1997, but there certainly was not an improvement from 41 to 56 per cent. If there had been, we would have adopted the policy that Opposition Members were then following—which was to do sod all. [HON. MEMBERS: "Oh!"]
    Mr. Deputy Speaker: Order. I hope that the right hon. Gentleman will—
    Mr. Blunkett: I immediately apologise. That was entirely unparliamentary language, and I have corrected myself.
    Mr. Deputy Speaker: Order. I am grateful to the Secretary of State that, on prompting, he corrected himself.

    Internet
    Mr. Paul Flynn: What measures he is taking to increase knowledge of the internet among those in full-time education. [127934]
    The Parliamentary Under-Secretary of State for Education and Employment (Mr. Michael Wills): We have provided an improved and strengthened curriculum in information and communication technology, better advice to teachers—including a £230 million teacher
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    training programme—and an unprecedented increase in equipment and resources to schools. The pupil-computer ratio in primary schools has reduced from 1:18 to 1:13, and internet access has improved dramatically—62 per cent. of primary schools are now connected to the internet, compared with only one in six in 1997.
    Mr. Flynn: Is the internet not a wonderful new resource for those in full-time education, enabling them to research their work in greater depth and breadth than was possible using traditional means? Is it not also a marvellous new way in which those in education can publish their own creative work to a huge audience? Would it not give a marvellous impetus if the Government added to the great work that they have done in that area by holding a competition to encourage schools that produce excellent work, and publishing that work on the Department's website?
    Mr. Wills: I thank my hon. Friend. I agree that these technologies provide unprecedented opportunities for children to improve their education. We are already seeing evidence that they are driving up standards. I welcome my hon. Friend's suggestion, which will form part of our continuing review aimed at improving the national grid for learning.
    Dr. Julian Lewis: Does the Minister accept that the delivery of education via the internet is subject to the same restrictions as other forms of education so far as partisan propaganda is concerned? In particular, does he realise that the Education Act 1986, which said that politically controversial subjects must be treated even-handedly, is being blatantly disregarded by the No. 10 website? I have in my hand an internet printout of an interview in which the Minister for Europe answers questions from schoolchildren on European unification. It is totally one-sided propaganda, with no indication of the arguments against the case.
    Mr. Deputy Speaker: Order. Time is passing, and the hon. Gentleman must ask his question.
    Mr. Wills: To be honest, Mr. Deputy Speaker, I was rather lost as the hon. Gentleman put out his own propaganda. He has fundamentally missed the point of new technologies. Use of the internet to deliver the curriculum fundamentally drives up standards. That is why we are investing so much money in it. It is a shame that the hon. Gentleman does not recognise the opportunities that it offers.

Business of the House
12.30 pm
Sir George Young: May I ask the Leader of the House to give us the business for next week?
The President of the Council and Leader of the House of Commons (Mrs. Margaret Beckett): The business for next week will be as follows:
MONDAY 10 JULY—Proceedings on the Consolidated Fund (Appropriation) Bill.
Consideration of Lords amendments to the Terrorism Bill.
The Chairman of Ways and Means is expected to name opposed private business for consideration at 7 o'clock.
TUESDAY 11 JULY—Consideration of a timetable motion relating to the Police (Northern Ireland) Bill.
Followed by remaining stages of the Police (Northern Ireland) Bill.
WEDNESDAY 12 JULY—Remaining stages of the Care Standards Bill [Lords].
THURSDAY 13 JULY—Opposition Day [17th Allotted Day].
Until about 4 o'clock there will be a debate entitled "Government Neglect of the Crisis in Agriculture".
Followed by a debate entitled "The Relationship between Parliament and the Executive". Both debates will arise on Opposition motions.
FRIDAY 14 JULY—Subject to further discussions through the usual channels, the House may sit to consider Government legislation.
The provisional business for the following week will be:
MONDAY 17 JULY—Consideration of Lords Amendments to the Utilities Bill.
Consideration of Lords Amendments to the Postal Services Bill,
TUESDAY 18 JULY—Progress on remaining stages of the Finance Bill.
WEDNESDAY 19 JULY—Conclusion of remaining stages of the Finance Bill.
THURSDAY 20 JULY—Consideration of Lords Amendments which may be received to the Government Resources and Accounts Bill.
FRIDAY 21 JULY—Private Members' Bills.
The House may also be asked to consider any Lords messages which may be received.
The House will also wish to know that on Wednesday 12 July there will be a debate on European Document No: 8795/00 and COM(00)268, relating to financial assistance to the Western Balkans and an unnumbered explanatory memorandum relating to the preliminary draft budget of the European Communities for 2001 in European Standing Committee B.
Details of the relevant documents will be given in the Official Report.
[Wednesday 12 July 2000:
European Standing Committee B—Relevant European Union Documents: (a) 8795/00;(b) COM(00)268, Financial assistance to the Western Balkans and revision
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of the financial perspective. (c) Unnumbered EM submitted by HMT dated 27 June 2000, Preliminary Draft Budget 2001. Relevant European Scrutiny Committee Report: HC 23-xxiii (1999–2000).]
Sir George Young: The House is grateful for next week's business and for that indication of the following week's business.
In view of the worrying position in Northern Ireland now that troops are back on the streets, may we have an undertaking that the House will be kept informed of developments there?
The House is still owed a debate on procurement for the armed forces, which is made more urgent by today's National Audit Office report of an average four-year delay on major weapons and a £3 billion overspend. With our armed forces being asked to do more for less, that debate is urgent.
Will the Chancellor of the Exchequer make an announcement on the comprehensive spending review during the next two weeks? If so, when? The statement is as important as the Budget, and the House would welcome details of the date and confirmation that there will be a full day's debate in Government time before we rise for the summer.
Will the Leader of the House clarify the position for Friday next week? Does it require a resolution of the House if we are to sit on that day? If so, when will that resolution be taken? If the day is earmarked for the football hooligans Bill, when will the draft Bill be published? Do the Government intend to take all stages of the Bill in one day, in normal time and with a guillotine? We should certainly resist that. In view of the importance of the Bill, which we support in principle, and given the congestion in the Government's programme, would it not be better to sit beyond the planned date of rising or abandon some other piece of legislation?
Finally, can we have an early debate on the damaging proposals of the Select Committee on the Modernisation of the House of Commons, which risk further undermining and bypassing the House of Commons?
Mrs. Beckett: I undertake to draw the right hon. Gentleman's remarks to the attention of my right hon. Friend the Secretary of State for Northern Ireland. The Government endeavour to keep the House informed on such matters; I know that my right hon. Friend will want to do so, should that become necessary.
The right hon. Gentleman will know that we have accepted the fact that there will need to be a debate on defence procurement. I am not sure whether the NAO report makes that more urgent, as—if I recall the matter correctly—the NAO was looking back at the disasters in the procurement of defence equipment under the previous Government. That does not exactly suggest that dealing with the report is urgent, although I accept that it is important and will require scrutiny in the House.
I anticipate that there will be an announcement on the spending review before the recess, although I am not yet able to give the right hon. Gentleman a firm date; we shall do so as soon as possible.
The right hon. Gentleman is right to point out that a resolution would be needed, were the House to choose to sit on Friday 14 July. That would, of course, be a decision

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for the House. He is also right to identify the fact that the possibility of such a sitting has been raised because of a possible Bill on football hooliganism. I understand that it is hoped to publish a draft Bill, or to have one available soon—perhaps tomorrow, but certainly in the quite near future. He will know that my right hon. Friend the Home Secretary has already indicated to the House that he wants to hold the widest consultation on any proposals.
As to the notion that this matter shows, in some way, confusion in the Government's programme—
Mr. Douglas Hogg: All stages?
Mrs. Beckett: That will be a matter for discussion.
As for the Government's programme, I have repeatedly reminded the right hon. Member for North-West Hampshire (Sir G. Young) that the number of Bills in train during this Session is almost identical to the number put through by the Conservative Government, in which he served, at a similar stage of the previous Session. Indeed, as one looks back over the years of Conservative Governments—especially during the 1980s—the programmes of legislation that they put through were substantially heavier than that currently being undertaken by the Labour Government.
The notion that the Government should abandon some other piece of legislation casts into sharp focus the progress of the present discussions with the Opposition on such issues. The shadow Home Secretary—not for the first time—comes to the Dispatch Box demanding that action be taken and offering Opposition co-operation, but follows that with constant back-pedalling after the discovery that they cannot deliver. That seems to be the position on the issue—it is one that we have been in on several occasions in the past. The fact that opposition commitments are given that the right hon. Lady apparently cannot substantiate is a matter for them; it certainly does not provide grounds for the Government to start ditching parts of their programme.
With regard to the proposals made by the Modernisation Committee, I cannot refute strongly enough the notion that they would in any way damage or undermine the ability of the House to scrutinise Government business. The proposals will provide a basis whereby there can be a reasonable—indeed, better—division of responsibility between Government and Opposition, because the Opposition would have more control over how the available time would be used. There is no suggestion that the time need be reduced. The proposals provide a framework in which decisions could be taken at a sensible time, and not at 3 o'clock in the morning.
Mr. Hilary Benn: As my right hon. Friend may be aware, earlier this week, a British citizen, Mr. David Chell, was sentenced to death in Malaysia on charges of drugs smuggling, which he denies. Given the Government's principled opposition to the use of the death penalty in all circumstances, could my right hon. Friend find time for a statement on the steps that the Government are taking to offer Mr. Chell support to save his life?
Mrs. Beckett: I understand the concern expressed by my hon. Friend. I fear that I cannot undertake to find time
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for a statement on the case in the near future, although I shall certainly draw it to the attention of my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs. Foreign Office questions will be held during the week after next, by which time the position may be a little clearer. In the interim, my hon. Friend might try to raise the matter in Westminster Hall.
Mr. Paul Tyler: Does the Leader of the House recognise that the proposed football hooliganism legislation raises serious issues, and will require careful examination. Members on both sides of the House have already said that we do not want to follow the pattern of the Dangerous Dogs Act 1989 and have the dangerous yobs Act passed at such speed that we do not take all the considerations fully into account. Will the right hon. Lady give us a clear assurance that it is the Government's intention to try to obtain an agreed programme motion for the discussion of this legislation?
In that connection, may I warmly welcome the report of the Modernisation Committee and ask the Leader of the House to give appropriate credit to some of the authors of the ideas that it contains? Does she recall that it was the right hon. Member for East Devon (Sir P. Emery) who, in his capacity as Chairman of the Procedure Committee, was the pioneer of the ideas that are contained in that report?
I wonder whether the Leader of the House has also had an opportunity to read a slim little pamphlet, called "Mr. Blair's Poodle", by the hon. Member for Chichester (Mr. Tyrie), in which he promotes the very ideas for programming motions in the House to which the Modernisation Committee has now given the force of its own recommendations? Does she accept that, at long last, many members of the Conservative party recognise that the proper role of Opposition is to give effective scrutiny to the Government's legislation, rather than simply to waste time in the middle of the night?
Mrs. Beckett: I cannot recall whether the hon. Gentleman was able to be in his place for the Home Secretary's statement, but I am sure that he knows that the Home Secretary did make it plain that he understood fully and shared the view that any proposals that came forward would require to be most carefully examined. I assure the hon. Gentleman that the Government recognise that.
The hon. Gentleman asked me for an assurance that the Government would seek an agreed programme motion, and I can give him that assurance. We are seeking agreement; indeed, I would go further and say that the Government are seeking, if at all possible, to get an agreed Bill. If it is not possible to get such agreement, obviously that will call into question to what degree and at what pace such proposals can be proceeded with.
The hon. Gentleman then asked me about the issues that are raised in the Modernisation Committee report. I share his view that it is right and proper that the right hon. Member for East Devon (Sir P. Emery) should receive credit for the proposals that he has advocated over many years of a long career in the House, and that the right hon. Gentleman has argued that we should take those steps.
I am afraid that I have not as yet had time to peruse the interesting pamphlet produced by the hon. Member for Chichester (Mr. Tyrie), who, as I understand it, speaks for

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the Conservative party from the Front Bench on constitutional matters. My hon. Friend the Parliamentary Secretary has read it, and tells me that it is much to be recommended. I look forward to reading it.
Mr. Peter L. Pike: Disregarding for a moment the sad fact that, yesterday, the Tory dinosaurs on the Modernisation Committee rejected modernisation and attempts to improve the way in which we scrutinise legislation, does not the statement that my right hon. Friend has just made with regard to the business of the House for the next fortnight highlight the fact that we really should make more use of an earlier report of the Modernisation Committee with regard to carry-over legislation? Is it not time that we moved forward to a five-year Parliament which the people elect with a rolling programme of legislation, without the need for an annual Queen's Speech and state opening of Parliament, and time that Bills should be limited and have to complete all their stages within one year of their introduction?
Mrs. Beckett: I share my hon. Friend's regret that, for the first time, it was not possible to reach more of a measure of agreement on the Modernisation Committee, but that is behind us. I am conscious, too, that it was he who, in that Committee, proposed the measures for greater use of carry-over legislation from one Session into another—of course, only by agreement—that were agreed by the Modernisation Committee in an earlier report.
The issue of a five-year rolling programme, which my hon. Friend has raised today, is a further step in that direction. It has often been considered, and may well be explored again in future, not only in this forum but among the many other bodies that from time to time consider how this place works. I am also mindful of the fact that my hon. Friend, very sensibly, has also suggested that, were Parliament to move to a wider programme, there would need to be other mechanisms to ensure that legislation did not simply drag on, as a discipline both for the House and for the Government.
Mr. Tony Baldry: The Leader of the House may know that the people of Banbury have been sending a Member to this place since the reign of Mary Tudor, and that—with the exception, I suppose, of the dark days of Charles I—never have a Government treated the House with such contempt.
We have Ministers who make statements to the media rather than to the House. The Chancellor of the Exchequer never even came to the House to announce that he was handing over to the Bank of England control of interest rates; that was something that the House learned from the media. We have a Prime Minister who has changed Prime Minister's questions from twice a week to once a week, and rarely attends the House. Now, for the Prime Minister's convenience, a book is to be placed in the Division Lobby, so that those who are too idle actually to attend the House may sign in on a Wednesday afternoon. It will be not a three-day week under this Government, but a one-day week, with the Executive treating the House and the people whom we represent with contempt.
Mrs. Beckett: I have seldom heard such nonsense, even from the hon. Gentleman. As to the suggestion that
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the Government in some way treat the House with contempt, may I remind him, as the statistics make quite clear, that the present Prime Minister attends Prime Minister's Question Time more frequently than did his predecessor, answers more questions and deals with more issues? Indeed, Ministers under this Government make more statements in the House than did our predecessors. Those are the facts. I know that they are loathed by the Conservative party, but they are facts.
The hon. Gentleman has perhaps slightly misunderstood our proposals. Even under this Government, it will not be possible to sign to register one's views in the Lobby without actually being present.
Ms Rosie Winterton: Has my right hon. Friend received any indication from Home Office Ministers as to when draft legislation on the private security industry is to be produced and whether that draft legislation will include measures to curb the outrageous activities of cowboy wheel clampers, who cause havoc for motorists up and down the country?
Mrs. Beckett: I cannot give my hon. Friend an exact date for the publication of draft legislation. I am well aware that it is an issue on which she has long campaigned, and I share her view that such activities cause great annoyance to members of the public. I understand that it is hoped to publish a draft shortly, but I cannot give her a more precise date than that.
Sir Michael Spicer: Is the Leader of the House aware that a lobby is coming to Parliament this afternoon to protest against the Government's policy for the Defence Evaluation and Research Agency, particularly in the light of the report of the Select Committee on Defence on the subject and the effect that the policy will have on defence relations with America? Will she provide Government time soon to debate this important subject?
Mrs. Beckett: I fear that I cannot undertake to find Government time in the near future. The hon. Gentleman will know that, at this time of year, there is always considerable pressure on such time. I am conscious of the great interest that has been taken in the future of DERA, and the Select Committee on Defence has produced an interim report. I was not aware that a lobby was coming to Parliament, but I am sure that it will be received with great welcome by Members from both sides of the House.
Mr. David Winnick: May I raise with my right hon. Friend a matter that I have mentioned to her on two previous occasions—compensation for former prisoners of war of the Japanese? Is it possible for her to consult her ministerial colleagues so that a decision—obviously, we all hope that it is a favourable one—can be made before we rise for the long summer recess at the end of July? There is overwhelming support for the view that these brave people should be compensated at long last, although that should have been done by the Japanese. I hope that my right hon. Friend will urgently examine the issue.
Mrs. Beckett: As my hon. Friend quite rightly said, he has raised the issue on a number of occasions. Indeed, he has campaigned long and hard on it and I know that that

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fact is widely recognised on both sides of the House. I fear that I cannot say to him with certainty that it is likely that an announcement will be made before the recess. He knows that the matter is receiving careful consideration, but I certainly undertake to draw his concerns and his pressure for an early announcement to my right hon. Friend the Secretary of State for Defence.
Mr. Peter Brooke: May I join my right hon. Friend the Member for North-West Hampshire (Sir G. Young), the shadow Leader of the House, in seeking to dissuade the Leader of the House from any plan to have a guillotine next Friday, because it is coincidental with Bastille day—a day devoted to the release of prisoners? The coincidence might confuse both schoolchildren and criminologists.
Mrs. Beckett: I thought that the date was familiar.
Mr. Dale Campbell-Savours: Can we have a statement on Inland Revenue inquiries into the criminal actions of the imposter who secured from the Inland Revenue private information on the personal tax files of Lord Levy? In that statement, can we be assured that all the journalists from The Sunday Times who are connected with the story have been interviewed? Can we also be assured that the Conservative party has no connection in any way with those criminal actions?
Mrs. Beckett: I share my hon. Friend's view that no one should be amused at the notion that anyone's tax affairs can be revealed simply as the result of a telephone call. Our laws do not say that, and I would have hoped that it is not what anyone in the House would expect. It is particularly remarkable that the person who obtained that information managed to do so without noticing that Lord Levy had paid—
Mr. Campbell-Savours: Millions.
Mrs. Beckett: Well, not only millions in previous years, but, as I understand from today's report, some £25,000 in corporation tax in the year in question. Apparently, that was overlooked by the people who wrote the story to which my hon. Friend referred. I am afraid I have no knowledge of whether people at The Sunday Times are being interviewed about the matter, nor, indeed, whether they have any connection with the Conservative party. I would hope that it is a matter of regret to anyone in the House that people's private tax affairs were not kept private.
Mr. Roy Beggs: I draw the attention of the Leader of the House to early-day motion 850.
[That this House welcomes the proposal announced in the Budget to lower VAT on women's sanitary products to 5 per cent. from 1st January 2001; agrees that women's sanitary products are not luxury consumer products; notes that continence products also classify as sanitary products and are not luxury consumer products; and calls on Her Majesty's Government to ensure that their definition of sanitary products will allow for the lowering of VAT to 5 per cent. on continence products, which are required, according to Government estimates in Good Practice in Continence Services, by up to 20 per cent.
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of the female population aged under 65 years, 40 per cent. of women aged over 65 years and between 7 to 10 per cent. of men aged over 65 years.]
That early-day motion has now received the support of 113 Members, many of whom are Government Back Benchers. Does the Leader of the House agree that that level of support illustrates the concern of Members about the anomaly that will exist from January 2001, when VAT on sanitary products is reduced, rightly, to 5 per cent., while the VAT that consumers will pay on incontinence pads will stay at the standard rate? Will she ask her right hon. Friend the Chancellor to come to the House and make a statement explaining his reasoning on the matter, which, if implemented as planned, would adversely affect the quality of life of an estimated one in four women in the United Kingdom?
Mrs. Beckett: I shall draw the hon. Gentleman's remarks to the attention of my right hon. Friend the Chancellor. The hon. Gentleman will know that one reason why Chancellors in successive Governments tend to be reluctant to make such changes is that, having made a change in one area, they are pressed to make it in another. However, the hon. Gentleman makes a valid point and, as I said, I shall certainly draw it to the attention of my right hon. Friend.
Ms Julie Morgan: I, too, congratulate my right hon. Friend on the report of the Modernisation Committee, which she chairs. If adopted by the House, the report will finally end late-night sittings, which are not conducive to the making of good legislation. I urge my right hon. Friend to have a debate on the report as soon as possible, perhaps before the recess.
Mrs. Beckett: I fear that I cannot promise my hon. Friend a debate before the recess. Indeed, that would not be necessary because, as long as the House has an opportunity to consider the matter in this Session, it has an opportunity to make its own decision as a House about whether it wishes to pursue this experiment.
I am certainly grateful for my hon. Friend's remarks, and it is important that, as a House, we use the time available to us well and effectively. Of course, although we have made repeated efforts—indeed, my hon. Friend the Member for Bolsover (Mr. Skinner) has offered to conduct seminars to educate the Opposition on how to be a good Opposition—I am afraid that they are not listening yet.
Mr. Eric Forth: Can the Leader of the House arrange an urgent debate, preferably next week, on the thinking behind the Government's priorities in their legislative programme? It would appear that the Government are about to try to force on the House and the people of this country a Bill that threatens to take away some of our most ancient and precious civil liberties on the spuriously urgent grounds that the matter must be dealt with extremely quickly and without proper scrutiny or consideration.
That contrasts with the fact that, already in this Session, the Government have given great priority to Bills such as the Sea Fishing Grants (Charges) Bill, the Fur Farming (Prohibition) Bill, the Royal Parks (Trading) Bill and the Census (Amendment) Bill, to name but four. Does that not seem very odd? Before we are asked to sign away

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civil liberties on the basis of urgency, the House would appreciate knowing why the Government apparently gave greater priority to those other matters.
Mrs. Beckett: The right hon. Gentleman chides us for making it a legislative priority to bring forward proposals to deal with issues of hooliganism, particularly those associated with football. However, I remind him that, in theory at least, that is also the priority of his Front-Bench colleagues. They challenged the Government to introduce legislation on that point and, indeed, offered the support of the Conservative party. The right hon. Gentleman has just made it plain why their words on the matter are not worth much.
As to why the Government chose to give greater priority to the Bills that the right hon. Gentleman mentioned, I recognise that they are matters with which he apparently has some quarrel, but he should know that, in fishing communities, the need to tackle the problems that had arisen with the sea fishing grants regime was of considerable importance. That may not matter much in Bromley, but there are many parts of the UK where it matters very much indeed. Similarly, there was great concern about those who were affected by the anomalies that required correction by the Royal Parks (Trading) Bill, which received a great deal of support from other Conservative Members.
As to whether those Bills should be a priority in terms of the time that they are given in the legislative programme, I share the right hon. Gentleman's view that they are relatively minor matters, but we believe that they make necessary improvements and they have to be passed. I agree with him that they should not have detained the House for a great deal of time, but the fact that they did is entirely down to him and his colleagues.
Mr. Jeremy Corbyn: May I take the Leader of the House back to the Modernisation Committee and its proposals? When we finally get round to debating them, would she welcome amendments to bring under parliamentary control and scrutiny the operation of the royal prerogative by the Prime Minister and other Ministers, to introduce a committee to scrutinise all appointments to quangos by Ministers, and to enable the House to have some say in the appointment of members of Select Committees, rather than the current arrangement whereby the Whips decide who the members should be?
Although many of us welcome any appropriate proposals that enable the public to see and understand what is happening, Parliament has an important role in asking questions and scrutinising and controlling what the Government do. Does the Leader of the House appreciate that, in modernising, we have to move forward and make the House as democratic as legislatures in many other countries?
Mrs. Beckett: Well, no, I can confidently say that I would not welcome any of my hon. Friend's proposals, for two good and simple reasons. First, they are totally outside the remit of the report to which we are referring and do not arise from the debate. Secondly, although they
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are obviously issues of great interest which are often discussed, ill thought out proposals would not do anybody any favours.
Miss Julie Kirkbride: Further to the questions that the right hon. Lady has already been asked about the Modernisation Committee's determination to close down the House and its democratic procedures, will she tell the House exactly how she plans to proceed with the measures? Will she be offering the House a free vote on them in this Session or the next? Will she be offering any vote on them at all, so that we will know whether they are likely to go ahead? Will she explain to my constituents how it can possibly be democratic for the House to vote only once a week on important matters that affect their lives?
Mrs. Beckett: From what the hon. Lady says, I doubt whether she has read the report. She ought to know by now that such matters are put before the House for it to decide; they are House matters and as a consequence there will be a free vote. I hope that there will be a free vote for Conservative Members as well, although I doubt it. If she is nurturing the illusion that in some way there is a diminution of democracy in the proposals, she definitely has not read the report.
Shona McIsaac: I understand that Europe is about to impose VAT on tolls in this country. Will my right hon. Friend acknowledge that that will have a devastating effect not only on people who use the Humber bridge, which already has the most expensive tolls in this country, but on those who use bridges throughout the land? The announcement is likely to be made in the recess, so will she ensure that nothing is done until we have had a statement in the next Session and, if the matter requires legislation, could she try to bury it at the bottom of the pile?
Mrs. Beckett: I freely confess to my hon. Friend that I am not aware of the time scale for such proposals, but I certainly undertake to get a reply for her from the relevant authorities. I fully understand her anxiety about the proposal and about such an extension of the operation of VAT. It strikes me that it will weaken still further the Opposition's case that we in this country face uniquely high transport charges, since so much traffic elsewhere in the European Union is on toll roads.
Mr. Michael Jack: Will the proposed football hooligan Bill be drawn widely enough to take into account other forms of anti-social behaviour abroad? Many of my constituents do not like lager louts in Benidorm performing acts of holiday hooliganism. Equally, those who have seen hooliganism on airliners might think that legislative attention should also be given to such people. Will the Bill be drawn widely enough to include those aspects as well?
Mrs. Beckett: I am not sure that even my right hon. Friend the Home Secretary could draft legislation that would deal with every kind of anti-social behaviour in all circumstances, but I understand that any legislative proposal is likely to focus particularly on those who already have convictions for violence, although not necessarily for violence previously identified as being

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football related. That will be the key element in the Bill, but the proposals are still being considered and will be fully discussed.
Mr. Paul Flynn: When can we hold a debate entitled "What happened to the peace dividend?" so that we can draw attention to the new arms race in Europe and the world? The threat to world peace has been greatly exaggerated and countries that are still impoverished, such as the former communist states, are being urged to spend less on education, health and housing and more on arms. America is pushing a new missile race based on the absurd claim that it is terrified of the might of North Korea. There has been a peace dividend, but, as always, it has cascaded into the pockets of arms traders'—principally American arms traders—who constantly exaggerate the threat to world peace.
Mrs. Beckett: I have some sympathy with my hon. Friend's concern that countries, especially those whose finances are already under pressure, should not be encouraged to spend more than necessary on their defence, given that they have other priorities for the support of their people. Hon. Members on both sides of the House understand the concern that he expresses. With respect, however, it is easy to poke fun at the notion that the United States should be alarmed at the activities of much smaller countries, but those who have access to atomic weapons should be feared if they are likely to use them. That is the matter of concern. I understand my hon. Friend's anxiety that resources should not be misused, but equally, he, like all hon. Members, would want us to be properly defended.
Mr. Hogg: The right hon. Lady will know that many hon. Members are deeply concerned about the problems in prisons, such as overcrowding and other conditions. She will also know that there is apparently a proposal that Brixton prison should be transferred to the private sector, something of which I would approve. Will she consider holding an early debate on prisons and, perhaps more importantly, an annual debate thereafter on prisons, possibly to coincide with the annual report of the inspector of prisons?
Mrs. Beckett: I have a great deal of sympathy with the concern that the right hon. and learned Gentleman expresses about conditions in the Prison Service, and I understand his reference to the recent reports of particular anxieties in Brixton prison. That important issue needs to be aired. but I fear that the pressure is naturally heavily on dealing with Government legislation at this time of year. He will understand that from his own experience in government. I cannot undertake to find time for a debate on the Floor of the House, even on prisons. However, although this will not be welcome, I recommend the attractions of Westminster Hall, which provides a further opportunity to initiate debates and to scrutinise Government policy.
As for the right hon. and learned Gentleman's proposal for an annual debate, he attends business questions often enough to know that, if we accepted all the proposals for annual debates on subjects of great worth, we would never
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do anything else. Some Opposition Members might welcome that, but it would not be welcome to those who want legislative change.
Mrs. Linda Gilroy: I warmly congratulate my right hon. Friend on the Modernisation Committee's proposals and those hon. Members on both sides of the House who have worked hard to introduce them. I note the response that she gave to the call from my hon. Friend the Member for Cardiff, North (Ms Morgan) for an early debate, which I would also welcome—but could that debate be held on a Tuesday or Wednesday as main business so that, in keeping with the spirit of the proposals, we introduce some of the education to which she referred, and, given that the proposals are about efficiency, so that those hon. Members who like to make efficient use of their time have the maximum opportunity to take part in that important debate?
Mrs. Beckett: I am grateful for my hon. Friend's remarks, and I am sure that all members of the Committee will be, because a considerable amount of work was done on those issues, although not all of it came to fruition. I undertake to bear her remarks in mind, although I cannot say at this point when the debate is likely to take place. However, I recognise the importance of holding that debate at suitable time.
Several hon. Members rose—
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I am sure that we could all make more efficient use of our time if questions and answers were briefer.
Mr. Mike Hancock: Will the right hon. Lady reconsider her response to the shadow Leader of the House, the right hon. Member for North-West Hampshire (Sir G. Young), who asked about a debate on the NAO report on defence projects? There has been no debate in the House on such a report for the past decade, although when her Government came to power, they promised substantial changes. Some of the issues discussed in the report are relevant to Government action since 1997 and I believe that a debate is long overdue. Considering that what has happened can be described as bungling bureaucratic incompetence at best, or a procurement fiasco at worst, the issue should urgently be discussed by the whole House.
Mrs. Beckett: I remind the hon. Gentleman that we have a defence procurement debate every year—although obviously the report was not previously available. I accept the importance of holding such a debate, but I cannot find time for it before the recess.
Dr. Phyllis Starkey: I add my congratulations to the Modernisation Committee on its report, which I skimmed through briefly before coming to the Chamber. I regret that Conservative members of the Committee have chosen to submit their own report, even though some of them did sterling work on previous reports, and previous Conservative members of the Committee made two important recommendations, which the Committee has brought forward.
May I press my right hon. Friend on the point about the House being given the opportunity to vote on the proposals, and seek her confirmation that such an opportunity will be

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provided this Session so that we can have a proper, efficient and effective Parliament for the next Session, which is what most of our constituents—and, I suspect, most of those of Conservative Members—desire?
Mrs. Beckett: I can assure my hon. Friend that the Government intend that the House should have an opportunity to reach a view on the proposals this Session. I share her view. I have long observed that there are those who nurture the illusion that they make sense and contribute valuably to debate in the small hours. I have never observed that to be true for the recipients.
Mr. Edward Leigh: No one would accuse the right hon. Lady of having been unconcerned about civil liberties during her long and distinguished parliamentary career, but may I put it to her—I am sure that she will agree—that a fundamental tenet of civil society is that a person should be prevented from leaving his country only after a hearing in an independent court, free of the police and the Executive? If that centuries-old freedom is to be abrogated, does she agree that it would be absurd to do so just because a football match is coming up in early September? I ask her most seriously whether we can go through our normal procedures: the production of a proper consultation document to enable the police to give their views, Second Reading of the Bill in the House, debates in Committee, consideration by the Lords and reconsideration by the House. Then we would have a Bill that we could all support.
Mrs. Beckett: The hon. Gentleman makes an important point, and I shall certainly draw his remarks to the attention of my right hon. Friend the Secretary of State. He will know that the Government do not intend to proceed other than with proper scrutiny and agreement, and when the draft Bill is published he may find that some of the points that he has raised are covered. He has made an important point and the Government are mindful of it.
Mr. John Cryer: May I press my right hon. Friend a bit further on the question raised by my hon. Friend the Member for Walsall, North (Mr. Winnick)? She will have seen early-day motion 900, on the compensation to be paid by the Manx Parliament to former prisoners of war of the Japanese.
[That this House congratulates the Tynwald for its decision to make an ex gratia payment of £10,000 to residents of the Isle of Man who were either prisoners of war or internees held by Japan during the Second World War; and calls on Her Majesty's Government to make a decision on whether it will make an equivalent payment, including widows, in the UK before this House rises for the summer adjournment.]
Will she undertake to point out to Defence Ministers that time is running short if they are to make a statement and follow the example of the Manx Parliament, as I think that they want to?
Also, when Opposition Members were asking questions, it occurred to me to ask her to remind the House who introduced the Jopling proposals—our side or theirs?
Mrs. Beckett: I take on board my hon. Friend's remarks. I note that he, too, has much pressed the claims
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of those who were prisoners of war of the Japanese, and I undertake to draw his remarks to the attention of my right hon. Friend the Secretary of State for Defence.
With regard to the Jopling proposals, my hon. Friend is right. They were produced by an all-party Committee, which was chaired by a distinguished member of the Conservative party. The proposals were put forward. in 1991–92. My hon. Friend has correctly identified part of my own contention—that that is a direction in which the House has been moving for a considerable number of years and which, in theory, has agreement in all parts of the House. The abrogation of that understanding and agreement during this Parliament has led to the present proposals.
Mr. Stephen O'Brien: In the light of the recent publication of the Government's proposals for a national waste strategy, will the Leader of the House give an undertaking that we will have an early debate on the matter, so that applications such as the one in my constituency by Minosus to deposit toxic waste down the Winsford rock-salt mine can be taken in that context, instead of the present piecemeal approach, which could be extremely damaging for the long-term future of the environment and our people?
Mrs. Beckett: I fear that I cannot undertake to find time for a debate on that in the near future. The hon. Gentleman might find time for one in Westminster Hall, and the Department of the Environment, Transport and the Regions takes questions next week.
Helen Jackson: Will my right hon. Friend allow me to pay tribute to her important role in relation to today's Modernisation Committee report in trying to reach consensus and make that an all-party recommendation? Does she agree that the proposals for programming and better use of time in the Chamber and Westminster Hall should be read carefully by all hon. Members? Those proposals are sensible and a decision should be taken to adopt them as an experimental way forward in the next Session of Parliament.
Mrs. Beckett: I am grateful to my hon. Friend. She is right to say that I endeavour to reach agreement and consensus on such matters, building on the consensus that has existed in the House for many years, until quite recently. We should continue to try to get such an agreed way forward. If the House agrees to proceed with such an experiment, I expect that few will wish to turn the clock back.
Mr. Andrew Tyrie: Earlier, the hon. Member for North Cornwall (Mr. Tyler) suggested that I was supporting the proposals in the Modernisation Committee's report for the programming of legislation. In fact, what I wrote in my pamphlet was that we in the House need to scrutinise power where it really lies—that is, with the Prime Minister, who hardly ever comes to the House, hardly ever votes here and hardly ever speaks here. Will the Leader of the House give urgent consideration to the possibility of a debate to find ways in which we can bring the Prime Minister nearer to the centre of our deliberations in the House?
Mrs. Beckett: No one ever suggested that the hon. Gentleman was supporting the proposals in the report.

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I confidently expect that he, along with most other, and perhaps all, members of the parliamentary Conservative party, is likely to vote against the report, as I see no indication of a free vote or free thinking on the matter on their side. The hon. Member for North Cornwall (Mr. Tyler) was probably quoting his remarks that programming is not only a good and valuable way of making the best use of time, but was somewhat inevitable.
On the issue of scrutinising where power really lies, and the Prime Minister's role, I repeat to the hon. Gentleman that he should know that the Prime Minister's record of attendance in the House and his record of statements in the House are infinitely superior to those of his predecessor. It is true that there was a substantial break with precedent with regard to the number of occasions on which Prime Ministers speak in the House. It was made by the right hon. Lady Thatcher.
Several hon. Members rose—
Mr. Deputy Speaker: Order. We must now move on.

Points of Order
1.15 pm
Dr. Evan Harris: On a point of order, Mr. Deputy Speaker. You and the House may be aware that yesterday there was an announcement in the press of £1 billion extra funding for science. That was also reported to be in a speech by the Chancellor, but no statement appears to have been made in the House, and no question appears to have been answered in today's Hansard on the matter. Should not Ministers be making such announcements to the House rather than through the media and in speeches outside the House? Questions on whether that announcement is welcome, whether there will be funding for equal opportunities in higher education, whether the unit of resource should be better funded, and other such matters could then be put directly to Ministers.
Mr. Deputy Speaker (Sir Alan Haselhurst): The Chair has received no notification of any announcement in any form to the House. I can only repeat what Madam Speaker has said on a number of occasions—that significant changes of policy should be announced to the House by one means or another.
Mr. John Bercow: On a point of order, Mr. Deputy Speaker. Have you had any indication from the Prime Minister or another Minister that the Government intend to return to twice-weekly Question Times, in the light of the new precedent established yesterday of the Prime Minister answering a question this week which he had failed to answer properly the previous week?
Mr. Deputy Speaker: No such notification has been received. That is not a matter for the Chair.

ESTIMATES DAY
[2ND ALLOTTED DAY]
ESTIMATES DAY
  ESTIMATES, 2000–01
    Class XV1, Vote 4

      HM Customs and Excise
      [Relevant documents: Second Report from the Treasury Committee, Session 1999–2000, on HM Customs and Excise, HC53, and the Government's response thereto, HC442; and HM Customs and Excise Departmental Report 2000: The Government's Expenditure Plans 2000–2001 to 2001–2002, Cm 4616.
      Motion made, and Question proposed,
      That a further, revised sum, not exceeding £482,077,000 be granted to Her Majesty out of the Consolidated Fund to complete or defray the charges which will come in course of payment during the year ending on 31st March 2001 for expenditure by the Customs and Excise Department on the administration of taxation; the operation of customs and revenue controls and other Customs and Excise-related services; and payments in respect of Shipbuilder's Relief and the Customs and Excise National Museum.—[Mr. Kevin Hughes.]
      1.16 pm
      Mr. Giles Radice: As Chairman of the Select Committee on the Treasury, not of the Sub-Committee, I shall make only a brief intervention. The hon. Member for West Worcestershire (Sir M. Spicer) is the Chairman of the Sub-Committee, so he will make the Chairman's speech. I simply wanted to act as a master of ceremonies, introducing the guests to the hosts.
      The Sub-Committee was set up in 1998 to scrutinise the bodies and organisations for which Treasury Ministers are responsible. For a year now it has been well chaired by the hon. Member for West Worcestershire. This afternoon we are discussing the Sub-Committee's fourth report, the second report of this Session on HM Customs and Excise.
      The Sub-Committee had five sessions of oral evidence and visited Canada to consider the merger of authorities. It has done a thorough job. There were three issues of which the Sub-Committee rightly made much. The first was whether it was desirable to merge Customs and Excise with the Inland Revenue, and the Sub-Committee concluded that it was a good idea, for three main reasons—that it would improve compliance with taxation, reduce businesses' compliance costs and reduce the Government's revenue costs.
      The Government, as my hon. Friend the Paymaster General knows, rejected our proposal and defended their position of so-called closer working between the Inland Revenue and Customs and Excise. I look forward to hearing the Government justify their position. In that context, I want to mention the news yesterday, reported in the Financial Times, that an internal investigation ordered by the new chairman of Customs and Excise has identified losses of up to £1 billion, which apparently could be double that, in Customs and Excise's collection role. That is its core activity, on which, apparently, it has fallen down. That is another reason why the Government might reconsider their position on merger. In any case, I should like to hear something about that matter.
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      The Sub-Committee also investigated alcohol and tobacco smuggling. It concluded that tobacco smuggling was a much more serious problem than alcohol smuggling, in the sense that the revenue loss is much greater, and it recommended that further resources should be given to Customs and Excise to slow down and eventually stop tobacco smuggling. I congratulate the Government on accepting many of our recommendations under this heading. I understand that they have provided extra resources amounting to £209 million. I should like to know how that money will be spent. Is it new money? This is a useful occasion on which to inform the House about that.
      The third main issue that the Committee considered was compliance and compliance costs. Again, the Government have accepted some of our proposals. We believe it to be important that they target reductions in compliance costs, and that there should be legislative underpinning of the so-called Sheldon doctrine. I understand that in a sense the Government have come forward with a compromise proposal, and that is a code of practice. I would like to hear about that, too.
      I end by congratulating the Sub-Committee on doing extremely useful work for the House. It has demonstrated the useful work that Select Committees can do in digging away at things. Their work is useful for Parliament—that is their main purpose—and for the Government. There are some who consider that Select Committees are there to attack the Government. In fact their role is to make Government accountable, so there should be a win, win situation. It is right that Government should be investigated and made accountable. It is right also that the activities of Government should be transparent, and the report provides a good example of a Select Committee doing its work properly.
      1.22 pm
      Sir Michael Spicer: I feel these days that I should begin all speeches by declaring an interest, however remote or obscure it is, as president of the Association of Electricity Producers. I do not think that there will be any read-across, but I declare the interest in case there is.
      I do not want my remarks to turn into a boring, self-congratulatory society debate. However, I shall return two of the compliments of the right hon. Member for North Durham (Mr. Radice). First, he is an excellent Chairman of the Select Committee on the Treasury. He is particularly good in the way that he has devolved responsibility. He allows the Treasury Sub-Committee freedom to investigate the range of departments and agencies for which the Treasury is responsible. I thank my other colleagues on the Committee, who have given a great deal of time to its work. I see some of them in the Chamber. Working on the Treasury Committee with the Sub-Committee has become almost a way of life for us.
      The Sub-Committee is behind the report, and it drafted the initial report. It has taken a pretty dyspeptic view about Customs and Excise and the way in which it is run. I believe that it is fair to say that we think that, as a department, it is defensive and pretty secretive. Perhaps that is because before the Committee began its work it was unused to discussing its policies in the light of day. It is pretty unwilling to innovate. Above all, it has been unsuccessful in carrying out its policy remit, particularly

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      its remit of closing down the revenue gap that arises from smuggling. As the right hon. Member for North Durham has suggested, this is perhaps symbolised by the revelation yesterday that Customs and Excise had lost up to £2 billion between 1995 and 1998 in unfound excise duties. That was in the period when Customs and Excise also lost around £1 billion of VAT, which, as far as I know, has not been found yet. Perhaps the Minister will tell us later that that money has been found. The loss of £1 billion in VAT is additional to the latest revelation of the £2 billion that was lost in excise duty.
      Smuggling is at the centre of the problem, especially cigarette smuggling, which is not only serious but increasing greatly. In the report, we accept that various remedies may exist for the massive loss of duties, which occurs through cross-channel and other international smuggling, especially of tobacco, but also of alcohol. We found that, were duties lowered, fewer losses through smuggling would be likely. When we visited Canada, we discovered that, when the Canadian Government reduced duties, especially on tobacco, there was a reduction in smuggling.
      However, we also accepted the conclusions of the Institute for Fiscal Studies, which showed that a reduction in duties would lead to a reduction in revenue. We acknowledge that the industry does not accept that conclusion. It argues that leakages occur, and that the elasticities are such that further increases in duties might lead to losses in revenue through further leakages to smugglers and negative elasticity.
      There is much logic in the industry's comments. We also recognise that the Treasury has forecast a fall in revenue, which accompanies high duties, but makes no assumption about future duty levels. However, the industry's position is not based on any independent research. There is no substantive research behind the industry's conclusions. We therefore have to accept that the IFS study is the only truly independent study that has been undertaken of the effect of duties on revenue. We took that study as our evidence. That is why the Taylor report is important in that context.
      There is a suspicion among those in the tobacco and alcohol industries that the Taylor report recommended a reduction in duty in response to the problem of smuggling. There is a further suspicion that the report's publication was suppressed because of that advice to the Government. The Committee was saddened by the fact that the conclusion and analysis of the Taylor report, which was forecast in the Budget last year, could not be published. The suspicion therefore lingers that the Government have on their desk recommendations to reduce duty in the context of smuggling and the general efficiency of Customs and Excise.
      Mr. Oliver Letwin: Did the Treasury Sub-Committee seek to take evidence from Mr. Taylor, and discover his account of his recommendations in the undisclosed document?
      Sir Michael Spicer: No, we did not decide to take evidence directly from Mr. Taylor. However, we pressed the Government hard to produce the papers behind the Taylor report. We received a negative response.
      Mr. Letwin: My hon. Friend will realise that it is important for the House to hear the answer to my next question. Why did the Sub-Committee decide not to interview Mr. Taylor?
      Sir Michael Spicer: I suppose the Sub-Committee accepted that, because the Government had commissioned the report, it was for the Government to determine whether it should be published. We certainly pressed the Government. Indeed, I shall press the Government today, as I shall return to the issue shortly. We all thought that it would have been helpful to have the report, but we also thought that, as it was a Government report, it was for the Government to decide whether to release it.
      Having dealt with the question of reduction of duties, we were left with the question of how we were to address the serious and remaining problem of what to do about the increase in smuggling, and the loss of revenue, amounting to as much as billions of pounds, resulting from the current rate. We considered two possible solutions. The first was greater administrative efficiency, which led us to discuss the possibility of closer working between Departments on revenue-raising. We found that the roots of what has come to be described as closer working were planted as long ago as 1994; we also found that very little had actually happened. In fact, no proper liaison committee had been established until our Committee's interest in the subject had been made public.
      We were unhappy about both the progress of closer working and the way in which the Government seemed to be setting about pursuing it in the future. In our report, we said:
      We are surprised that more thought has not been given to the evaluation of the Closer Working programme… We received no clear indication from Customs and Excise of how it intended the Closer Working programme to develop in future.
      We concluded:
      do not believe that the Closer Working programme will fully achieve its objectives and deliver the benefits claimed by Customs and Excise. Consequently, the option of merger requires serious consideration.
      That brought us to the question of merger between the Inland Revenue and Customs and Excise. In part, we referred to Canada on that, because Canada had recently carried out precisely such a merger. We said to the Canadians, "We have two revenue-raising departments, one of which does not seem to be working particularly well. Do you think that there are arguments for merging?" We found that, in Canada, many of the worries about merging did not apply. It had worked, and we thought that there was at least a case—a case that the Government should consider—for merging the two departments. The argument would be that, given that Customs and Excise says that it is short of resources, merging the departments would make economies. More money could be used for customs purposes than is used at present, and the whole arrangement would be administered better.
      Other arguments were advanced. The right hon. Member for North Durham mentioned compliance costs for industry. It has been argued that—certainly in regard to the collection of VAT—Customs and Excise is less than assiduous in allowing for the needs of business, and in making business tax collection as efficient as possible in terms of costs. The Inland Revenue undoubtedly does that; it is argued that Customs and Excise tends to be more heavy-handed. Compliance costs might therefore be another factor in favour of merging the departments.
      However, the Committee was particularly interested in efficiency in the context of customs and collection. When we questioned the Minister, we learned that the

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      Government had not particularly studied the Canadian example—which we had pressed them to do for some time—and that they were relying on a report produced some six years ago, under an earlier Administration, which had apparently argued against a merger. We pressed on many occasions to have the report put on the Table, but were unsuccessful. We were even prepared to look at it in confidence, but there was complete reluctance to let us look see it. As it was used constantly in evidence—it was the only real justification for not going further into the merger issue—we were extremely dissatisfied.
      I must read to the House the conclusions that we reached. It was a serious matter to us. We felt that we should have been allowed to look at the report on the question of merger. We say in paragraph 22:
      It is extremely disappointing that, as the Freedom of Information Bill began its passage through Parliament, Customs and Excise refused us access to a six year old report on a matter of departmental organisation central to our present inquiry, far removed from party political controversy or national security, defence or foreign policy concerns. We entirely fail to see how the public interest could be harmed by the disclosure of this report, although, of course, the Government's case against merger of the revenue departments might easily be harmed if we were to have found that the report's analysis of the costs and benefits of merger had been inadequate or skewed against the merger option. We are led to conclude from this episode that the 1993 report would not have stood up to vigorous scrutiny by this Committee.
      That was a fairly serious thing for us to say. It did not please me to have to say it, but I still hope that Customs and Excise and the Government will reconsider the matter. An argument against merger cannot be based on the findings of a report whose analysis and premises we are not allowed to see.
      In trying to achieve greater efficiency in Customs and Excise, proposals have been made to introduce new technology, particularly X-ray equipment. The problem is that, in recent years, none of the three great initiatives on the matter seems to have had any positive effect. The first resulted from the 1998 alcohol and tobacco fraud review. That ended with a lot of conclusions about the need for more technology and various other proposals, focusing particularly on X-ray equipment. That stood in the open and was apparently applied, but, when we got to last year's pre-Budget report, the programme put forward as the answer to the problem was almost precisely the same as that which had been put before Parliament almost two years previously. Apparently, nothing in the meantime had happened. The smuggling had become worse in the process.
      Then on 30 June, just a week ago, the Paymaster General announced that she had
      commissioned a full independent investigation into the collection of excise duties in HM Customs and Excise,
      so we have had three promises of new initiatives on Customs and the way in which it collects duties. In the meantime, no one disputes that the situation is getting worse and worse.
      The last Government initiative was certainly in anticipation of the latest scandal being revealed. There we have it. Once the £2 billion had been acknowledged to have been lost, the Government came up with yet another initiative, which seems similar, if not identical, to previous initiatives, which so far have failed.
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      That leaves us with a number of questions to ask the Government. What did the Taylor report say? They are not prepared to let us look at the actual text of any report, but we need to know. The Committee decided to leave the Government quite a lot of room for manoeuvre on the question of excise duties and their effect on smuggling; some of us even felt that we left them too much room for manoeuvre. In return, Parliament must be allowed to know the details of the Taylor report.
      Has there been—or will there be—proper consideration of the merger issue? Specifically, will the Government think again about why Parliament should not be allowed to see a six-year-old report on which they seem to be basing the entirety of their case for not considering the merger issue further?
      There have recently been three statements that new technology will be introduced. But why has technology not been more effective? Why have there not been greater results from a programme that has now been under way for several years? Why is the programme becoming less effective with the passing of each year?
      There is also the issue of the latest scandal. If there is to be a public inquiry, when will it be established and when will it report? Given that the new scandal comes on top of what one might call previous unfortunate incidents, will the Government start to take a rather less cavalier attitude to the overall issue of smuggling and reforming Customs and Excise? Will Ministers also reconsider the Committee's suggestions—although they have already rejected most of the major ones?
      1.41 pm
      Mr. Jim Cousins: I do not envy my hon. Friend the Paymaster General in having to address this issue. The Government's inheritance from the previous Administration on the issue was woeful. That was made clear to the Treasury Sub-Committee in the evidence presented to us in our examination of Customs and Excise. It is quite clear that Customs and Excise have long been badly led and managed, badly resourced and badly organised. It is also clear that there are not sufficient resources for it to do the job that it wants to do and should do.
      Nevertheless, I acknowledge the heroic work with VAT and excise duty, being done by many people in the front line of Customs and Excise. The House should pay tribute to the excellent work being done daily by them in a desperate and heroic attempt to stem a tidal wave of abuse that they are not properly equipped and organised to deal with. The House should try to address that issue in this debate.
      We must deal with some very serious abuses affecting our communities and striking at the heart of public confidence in some key aspects of the machinery of government. If we cannot stem the rising tide of tobacco and alcohol smuggling, the very integrity of Government policy will be put at risk. Thousands of legitimate jobs and businesses are being put at risk by those growing abuses. We should not overlook the similar problem in the collection of value added tax. VAT evasion and growth in the informal economy also are endangering legitimate jobs and businesses. The Sub-Committee has attempted to address that overall issue.
      The Sub-Committee clearly formed the view that the abuses that I have described are real and increasing, and that they are probably more extensive than Customs and

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      Excise were at that time prepared to tell us. I think that the Sub-Committee's instinct on that matter has been proved by subsequent events to be entirely correct.
      Secondly, the Treasury Sub-Committee realised that wholly new demands were being placed upon Customs and Excise, particularly around the growth of electronic commerce and the problems of identifying businesses and tracking commercial activity for the purposes of excise and VAT control and enforcement.
      Thirdly, the report drew attention to some massive and quite deep-rooted organisational failures and inefficiencies and the lack of resources available to Customs and Excise either to deal with the growing number of abuses or to confront the need to expand their efforts and organisation to deal with new areas of commerce and the new demands.
      Since the Treasury Sub-Committee reported, at least four major inquiries have either reported with reference to Customs and Excise or are about to do so. They include Lord Grabiner's report on the informal economy, particularly VAT abuse, and the report of his honour Gerald Butler on his inquiry into the case of Regina v. Doran, the so-called "Operation Steeler" case, which threw considerable doubt on the internal effectiveness and good order of Customs and Excise as an investigating and prosecuting organisation. The Government responded to the Butler inquiry by setting up a further inquiry, led by the Attorney-General, into whether Customs and Excise should properly retain their powers of prosecution.
      There was also—this makes life particularly difficult for my right hon. Friend the Paymaster General this afternoon—the inquiry that she launched only last Friday as a result of information that was brought to her by the new chair of the Customs and Excise board into excise evasion, this time in respect of alcohol. This afternoon's debate provides an opportunity for my right hon. Friend to set out her objectives and those of the Government in that inquiry. I am sure that she will do that.
      Although one must always show proper courtesy, respect and restraint on these occasions, I very much welcome the indication that the new chair of the Customs and Excise board will be more proactive than several members of the Sub-Committee felt that the previous leadership of the Customs and Excise board had been. That is an excellent sign, albeit that it puts my hon. Friend the Paymaster General in a difficult position this afternoon. The House will rightly expect to know a great deal more about her intentions. Much of the debate should be taken up by my hon. Friend explaining to the House how she intends to address the problems.
      A number of other points should also be mentioned. First, we should consider the large scale of the abuses in respect of tobacco and alcohol. The hon. Member for West Worcestershire (Sir M. Spicer) referred to the fact that in its evidence to the Select Committee, the Tobacco Manufacturers Association, which obviously has an interest in the matter, asked for a reduction in tobacco duties as a method of controlling the abuse. I do not share that view, but the association showed evidence to the Committee that almost one in three of packets and cartons of cigarettes sold in this country were either smuggled in or re-imported after having been disguised as exports. The association attributed a total revenue loss of some £3 billion to smuggling on that scale.
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      The scale of the abuses is recognised in some of the court cases. A gentleman in Essex was fined £10 million by a court after being found guilty of smuggling offences, which shows that the scale of abuse is considerable. Legitimate traders are extremely concerned about the scale of abuse. I have been given a dossier of evidence by a firm which runs a cash and carry business in Essex, which reveals an extensive correspondence between the firm and the south London and Thames branch of Customs and Excise in an attempt to address obvious abuses that have come to the firm's attention, but without success.
      It is a cause of concern that the ability to tackle the growing scale of abuse appears non-existent. That is partly because of the considerable cuts in staff numbers that were made by the previous Government. They reduced numbers and also disrupted some of the lines of command and control that would have been useful to contain the growing abuses. However, it is fair to point out that the latest annual report from Customs and Excise shows that the number of man-years available in the south-east—which is in the front line of our defence against excise duty abuses—in 1999–2000 was less than in the previous year. That is a matter for concern.
      The Government intend to recruit almost 1,000 additional officers for Customs and Excise, but it is important that my hon. Friend the Paymaster General sets out how that will take place and on what scale. What resources and organisation will be provided to support those additional members of staff?
      The Paymaster General (Dawn Primarolo): I do not intend to intervene through the debate but will give a reply at the end. However, on the specific points that my hon. Friend raises about the south-east, he will know that we now deploy staff in teams according to risk, and we move the teams around considerably. However, I understand that that is not happening in the south-east. My hon. Friend raises an important point that I may not be able to deal with in detail later. I have heard his comments and I will try to address them when I reply. I shall try to address all the specific points that hon. Members raise.
      Mr. Cousins: I am grateful to my hon. Friend for saying that. I draw to her attention the fact that I had hoped to be able to say—based on the annual report from Customs and Excise—that the unsatisfactory position in the south-east in 1999–2000 would be corrected in 2000–01. Conservative Members will understand that Labour Members constantly hope for such relief, but I was not able to find it when I read the Customs and Excise report. I was filled with gloom to discover that a change in regional boundaries meant that the figures for the south-east for 2000–2001 were not available. That does not reinforce confidence among people whose businesses and jobs are at risk in the area.
      One of the Committee's conclusions was that there are deficiencies in the internal organisation of Customs and Excise. Although the possibility of closer working, or even merger, with the Inland Revenue has been suggested, the people responsible for value added tax do not work sufficiently closely with the people in the excise section. In addition, the respective Inland Revenue and Customs and Excise computer systems do not talk to each other, even though huge resources have been applied to them.

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      The internal information arrangements in Customs and Excise involve a computer system called PRISE, which the previous chairman of the Customs and Excise board assured the Committee was not relevant to increasing the efficiency of excise enforcement. Other internal information systems include CRIP, the compliance risk information project, and the analytical centres project. Considerable sums of money have been spent on both, but the Committee was unable to satisfy itself about who in Customs and Excise had access to them.
      The overall picture is an extremely unhappy one. The Government must rectify that, urgently.
      The Government have pledged £209 million in additional resources for Customs and Excise, and have focused particularly on the £23 million being made available for new scanners. They will greatly improve the speed, efficiency and effectiveness of excise evasion detection, and I hope that my hon. Friend the Paymaster General will clarify whether that £23 million is included in the total of £209 million, or is additional to it.
      However, the first of those scanners will not become operational until November. Originally, they were being installed to deal with excise duty problems but now—after the almost incredible horror of the incident in which so many unfortunate Chinese people were trapped in a container—it is clear that they will also have to bear the burden of immigration detection. The additional resources will therefore have to cope with demands way in excess of what was forecast when they were first allocated.
      Mr. David Kidney: Would not every lorry go through fixed X-ray scanners at ports? Could not the scanners detect illegal immigrants in one lorry, and an illegal load of cigarettes or tobacco in another?
      Mr. Cousins: My hon. Friend is right, of course, but he should bear in mind that using the scanners is complex. New and much larger dedicated parking areas will have to be laid out, where lorries can queue to use the scanners. Clearly, moreover, not every lorry could be scanned. Questions of intelligence, preselection and so on would therefore arise again. That only reinforces my anxiety about whether Customs and Excise is sufficiently well organised internally to be able to do the job with the greatest effectiveness.
      In addition, when the scanners are put into use we shall soon hear about horrendous parking problems and delays in processing lorries and vehicles through Dover. The House had better stand ready for those complaints, because there will then be immense pressure on Customs and Excise to reduce the number of lorries that it seeks to check and scan. These are very difficult issues.
      Mrs. Ann Winterton: I have been very interested in the hon. Gentleman's remarks about the scanners that are to be introduced into our major ports. I hope that he will forgive my ignorance, but I wonder whether a solution, as far as immigration is concerned, is that lorries should pass under gantries, which can be built quite easily, and that there should be heat-seeking cameras on the top and at the sides, rather like those used by the police when they go up in helicopters to try and find people who are missing but not yet dead. Is that an
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      over-simplistic view, or could it be carried out more simply than the complete scanning? Would it cost less and be easier to implement?
      Mr. Cousins: The hon. Lady raises an issue that does not properly form part of this debate, and to attempt to respond to it is totally beyond my information. She speaks of immigration, which is the responsibility of the Home Office. I was seeking to draw the attention of the House to the fact that the scanners, which were acquired for the purposes of detecting excise duty evasion, may be given a new range of responsibilities as a result of other events. That will make life more difficult when it comes to detecting excise duty evasion.
      There is considerable confusion of investigatory authorities in considering excise duty evasion. It was of interest to me that in its most recent report, the Intelligence and Security Committee drew attention to the fact that drug smugglers and other organisations with political purposes, which are often linked to trade in materials such as drugs, are switching their organisational skills into tobacco smuggling. It is closer to legality in most regimes than drugs, and the profits are as great or greater.
      The Intelligence and Security Committee was extremely concerned about the lack of co-ordination of our investigation services in redeploying to meet that difficulty. We have the National Criminal Intelligence Service, the national investigation service within Customs and Excise, normal police arrangements and the activities of the security services. The Intelligence and Security Committee echoed the evidence of the Select Committee on the Treasury in its great concern about the lack of co-ordination and effectiveness between the various investigatory agencies.
      The matter goes to the heart of the Butler report about the collapse of the Steeler case, in which those very issues are highlighted dramatically. The Government must, as a matter of urgency, address the confusion and lack of effectiveness on the part of the various arms of investigation. They are coming at the same problem from a number of different directions, using various techniques, resources and legal channels, and the result is not in the public's best interests.
      Let me turn to closer working. The Committee discussed a merger of Inland Revenue and Customs. The House must confront the old Spanish—perhaps I should say Spanish-British—practice of having two distinct revenue collection agencies. Most modern revenue collection regimes have a single agency. Those who defend the practice of having two should justify it. It is not normal, and other revenue collection regimes have not found it the most efficient and effective model.
      The Government, however, favour closer working between the Revenue and Customs. That requires us to confront long-established cultural differences between the two organisations—the main reason why people reject merger. We cannot escape the problem of having two organisations with different histories and cultures by simply avoiding the question of merger. That difficulty will have to be addressed if closer working is to be established.
      There is practical evidence for that proposition. The Inland Revenue, which has historically not visited taxpayers in great numbers, has introduced a programme

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      to increase visits. Customs and Excise, meanwhile, which has historically made many visits to those who pay VAT, is scaling back. That is an example of what closer working means, and of the difficulties involved.
      The legal basis and status of investigation officers in the two organisations are hugely different. Closer working cannot overcome that. We must put investigations on a platform of common intelligence and common investigatory powers. To forestall anything that the hon. Member for West Worcestershire might say about that, I do not mean that we should always scale up the powers of the Inland Revenue to those available to Customs and Excise. We should find new, more appropriate legal powers to address issues such as electronic commerce.
      The establishment of a single business register list will be an important innovation, providing an identifier and a tax collection point for Inland Revenue taxes, VAT or excise duties. The Government have launched pilots, experiments and test studies on a list, but I am far from satisfied that their approach is as well co-ordinated as it should be. Some initiatives have been taken through the Department of Trade and Industry and others through the Treasury. I wonder whether enough co-ordination or urgency is being given to a simple organisational change that could provide a platform for more effective regulation and enforcement to protect legitimate business.
      Neither the Committee nor the House knows what commitment the Inland Revenue and Customs and Excise are genuinely making to closer working. There is a great deal of talk, and some money has been allocated. Mysterious switches of money are made between Customs and Excise and the Inland Revenue, but what it all actually involves remains entirely obscure. Today's debate provides a chance to begin to tease out what closer working means.
      The House is in a difficult position. The scale of the problems that we detected when we made the studies that helped to produce the report has been entirely borne out by subsequent events. Looking back on the matter, there was almost an attempt to conceal from the Committee the true scale of some of the difficulties. Even while the Sub-Committee was conducting its investigations, certain matters must have been known; for example, the collapse of the Steeler case and the subsequent discrediting—fairly or unfairly—of the Customs and Excise as a prosecuting authority. I have some doubts—
      Dawn Primarolo indicated dissent.
      Mr. Cousins: The Minister shakes her head, so I accept that she is trying to reassure me. However, I remain concerned as to whether Customs and Excise were frank enough with us during our inquiries. We were there to help. We identified problems. They are much greater than even we had supposed. The matter is of serious public importance. It puts at risk jobs and businesses throughout Britain. The scale of abuse in the excise area and, to some degree, in the informal economy discredits some of our normal, legitimate practices.
      Such matters cannot be overlooked; they must be addressed. The Paymaster General is entirely capable of shouldering the burdens and setting us on the right course. We look to her to reassure us and to tell us clearly that we are set on a course whereby these matters will be addressed.
      2.11 pm
      Mr. Edward Davey: I apologise to the House for the fact that, unfortunately, I shall not be present for the end of the debate. I apologise especially to the Paymaster General, because her answers and her summing up of such debates are always useful—certainly in relation to my remarks.
      I serve on the Select Committee on the Treasury and attended a few of the Sub-Committee's hearings, although I did not play a great part in the inquiry. I pay tribute especially to the hon. Member for West Worcestershire (Sir M. Spicer) and to my other colleagues who undertook the bulk of the work. It is a tribute to the operation of Select Committees that when I considered the proposals and recommendations made by my colleagues, I agreed with all of them.
      The report is strong; it is hard hitting. As the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) says, it raises many questions about the way in which Customs and Excise has been working for many years. We may question whether we got to the bottom of all the issues. The Sub-Committee may have to return rapidly to the issue of Her Majesty's Customs and Excise. The questions that we focused on need to be answered quickly.
      Sir Michael Spicer: The hon. Gentleman reminds me that we had already agreed to return to the matter. The Liaison Committee has said that the Sub-Committee should follow up that report and we certainly intend to pursue the matter.
      Mr. Davey: I welcome that news. It makes this debate even more important. It is the job of the House and of the Committee to ensure that we play our part in turning around that failing organisation. There could be many reasons for the failures. It could be under-resourcing, although I think that it has much to do with poor leadership over several years. The new head of the board faces a real challenge.
      Two major issues were identified in the report. The first is smuggling and the measures that are needed to bear down heavily on that abuse. The second is the merger. The Committee came out strongly in favour of merging Customs and Excise with the Inland Revenue.
      Customs and Excise might not be capable of taking on both those challenges simultaneously. However, that is not an argument against having a strategic vision for that important Department of State. It is crucial that the Government go much further than they did in their reply to the Committee. Although this may not be the time to take a rapid approach to merger, they should tell us that merger is the goal. It may take place in four or five years, but the Government should tell us that that is what they want for Customs and Excise.
      Many of the remarks made by the hon. Member for Newcastle upon Tyne, Central were especially pertinent. He referred to the failures of co-ordination and communication within Customs and Excise. Those are shown clearly by the report. It is thus doubtful whether a quick merger would be possible, because of such weaknesses—mainly in Customs and Excise. However, merger must be the vision.
      I was delighted to read, in Wednesday's Financial Times, the suggestion that the Government may be considering merging Customs and Excise with the Inland

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      Revenue because of the failures of Customs and Excise in relation to alcohol smuggling. Obviously, the Paymaster General will want to put on record the Government's position and whether, after the recent evidence, they have shifted from their reply to the Committee's report.
      Dawn Primarolo indicated dissent.
      Mr. Davey: The hon. Lady shakes her head, so it appears that they have not done so.
      I hope that she will leave the door open to that policy goal—as she did when she came before the Committee. Possibly, she will suggest that there will be a review or an independent inquiry into the possibility, so that the debate can progress. That is the right route.
      The Committee's arguments for a merger should be put clearly to the House. The evidence showed many benefits, such as improved compliance with taxation. Presumably, that would bring a greater yield to the Exchequer. Another important advantage is often overlooked—indeed, far too often overlooked in Whitehall: the reduction in business compliance costs.
      When we debate the regulations that we impose on the private sector, we often overlook the fact that taxation is the biggest source of regulation, involving not just the cost of the tax itself, but the compliance costs for completing forms, keeping records and contacting the tax authorities. Taxation—be it VAT, excise duties or corporation tax—is the largest regulatory burden faced by business.
      For too long, the House has paid too little attention to that fact—especially as it relates to Customs and Excise. We must bear down on business compliance costs; they are far too high, especially for small businesses, which face too many inspections. If there was only one point of contact with Government in respect of taxation, that would simplify their affairs. They would expend less senior management time and less anxiety on their relationship with the tax authorities. From the point of view of the private sector, that is a strong case for merger. It should be one of the clinching arguments.
      The reduction in the Government's revenue collection costs is a strong argument. I was struck by some of the examples in the Committee's evidence. In a former life, I undertook a little research into the Swedish taxation system. For my sins, I visited the centre outside Stockholm where taxation forms are printed, as my job was to ask about the questions on the forms. It was interesting to see how many taxes were dealt with by one form; for example, income tax, VAT and property tax.
      Sweden may be smaller than Britain, but there is no reason why we should not take that route. We could try to include as many aspects of taxation as possible—especially for business—on one form. That is a real goal. It certainly coincides with the Committee's recommendations.
      I would go a little bit further, but I promise that I will not spend too long on this subject because you would call me out of order, Mr. Deputy Speaker. I believe that we have far too many bureaucracies in our town halls. One of the strongest arguments for abolishing council tax and introducing a local income tax is that it could piggyback on the Inland Revenue. We could then get rid of a lot more of the tax bureaucracies in this country and save an awful lot of money in the process.
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      The Committee heard some very strong arguments for a merger of Customs and Excise with the Inland Revenue; so why do the Government persist in not going ahead with it? I was interested in the physical reaction, from a sedentary position, of the Paymaster General when I said that perhaps Customs had lot on its plate at the moment, especially in tackling the smuggling problem. That may be the reason why the Government are not pushing ahead with considering the merger. If that were so, it would be slightly more understandable. If it is the case, I hope that the Minister will confirm it, because I found the arguments in the Government's reply unconvincing.
      There were two main arguments. It was said, first, that a merger would entail risks, costs and structural upheaval. Of course there would be up-front costs; of course it would be an upheaval. Of course there are risks in the process—there are in any structural change, and certainly one of this magnitude. That is why there would be a long process of consultation, a process in which the merger was planned out over a period of four or five years, to ensure that we got things right. That is not an argument against the merger; it is just an explanation of the obvious.
      The second main argument is that closer working can achieve the benefits of merger without the disbenefits. Well, we have been experiencing closer working and it does not seem to have been very effective, for many of the reasons that the hon. Member for Newcastle upon Tyne, Central has just stated. The Government really must do an awful lot better to produce—
      Dawn Primarolo: I shall answer that point now, as the hon. Gentleman will not be present for the end of the debate. That is a contradiction that continually runs through this debate. My hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins) asked why the Inland Revenue was doing some more visits while Customs was reducing its number of visits. The answer to that question is that, through closer working and shared experience, the two Departments have a better understanding of when they should visit and how to conduct such visits. Therefore, what appears to be a negative—that is, a reduction in visits—is actually—[Interruption.] My hon. Friend the Member for Newcastle upon Tyne, Central laughs, but it is about understanding risk, sharing information and visiting where necessary, but not burdening business with unnecessary visits. That is just a minor example of some of the things that are emerging from closer working.
      Mr. Davey: I am grateful to the Paymaster General for intervening then and explaining that point, and I am pleased to hear that some benefits are emerging from the closer working programme. However, from the evidence that the Sub-Committee heard, and that I have read, it does not appear that the closer working programme is progressing apace. There does not appear to be a huge degree of commitment at senior level to it, and as I—
      Mr. Cousins: I was trying to bring to the attention of the House the fact that visiting policies clearly differ. I draw it to the hon. Gentleman's attention that the Sub-Committee had evidence that there had been a previous programme of joint visits by Customs and Excise

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      and Inland Revenue, which had been quietly abandoned and ditched by both organisations. That gives rise to some concern about what the present course of action might be.
      Mr. Davey: I am grateful for that intervention. The hon. Gentleman shows that he is a rather greater expert on the details of this subject than I am.
      That intervention backs up the point that I was coming to, about whether there is commitment, and sufficient commitment, to the closer working programme. We hear that Customs and Excise has undergone a restructuring programme. It restructured its board recently; I am not quite sure why. I am sure that the Paymaster General will enlighten us in due course. However, interestingly, when that restructuring was going on, no board-level closer working director was appointed. If there was a commitment to closer working at the highest level, one would have expected that. One would have expected the board to take the matter seriously.
      We are told by Ministers that closer working is really important—that the two organisations will learn from each other, and understand the benefits and share information and so on, which is what we believe could happen after merger. However, I am not convinced that experience of closer working has shown that the benefits of merger can be achieved in that way without the disbenefits. The closer working programme must do an awful lot better, and be undertaken with far greater commitment and extremely quickly if the House—and, I believe, the Sub-Committee—is to have faith in it as an alternative to merger. I am not convinced by it at all.
      When, elsewhere in government, some successful mergers of Departments have taken place, the risks, the costs and the structural upheaval—all the excuses that have been made for not merging Customs and Excise and the Inland Revenue—have not been considered. I pay tribute to the Government for the way in which they have integrated the Contributions Agency with the Inland Revenue. It was an excellent idea; I totally support it. The Government have also set up ONE, by merging parts of the Benefits Agency and the Employment Service. The political will was there to carry out that merger. Why is not the political will there to carry out this merger? It seems that when the political will is there, the practical arguments against merging sometimes fade away.
      I shall now move on to the smuggling issue. The Paymaster General knows that, in debates that we have had on that issue, in the House and in the Committee of the Finance Bill, I have in many ways supported what the Government have said about administrative changes and the introduction of new technology, such as X-ray scanners. However, I have been concerned about the delays in action, and the report increases my anxiety.
      I know that the Paymaster General is committed to hitting the smugglers hard, and she is coming up with a set of policies which, I believe, will be effective; but there are delays. As the hon. Member for Newcastle upon Tyne, Central said, many people are worried about those delays.
      Dawn Primarolo indicated dissent.
      Mr. Davey: The Paymaster General shakes her head, but we have known that this has been a problem since the day that the Government took office, and we had hoped that we would have got further down the track than we have.
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      That brings me to the report in yesterday's Financial Times in which, as the right hon. Member for North Durham (Mr. Radice) has said, there is news that alcohol smuggling is significantly more extensive than Customs and Excise had previously thought. When we debated the subject in the Committee on the Finance Bill and when we had evidence from Customs and Excise, we heard that the real problem was tobacco smuggling, not alcohol smuggling, but the new evidence would suggest that alcohol smuggling is on a par with tobacco smuggling. If that is the case, that again raises questions about the competence of officials within Customs and Excise, because they had not detected the scale of the problem earlier; their capacity to tackle the problem is seriously called into question.
      I know that other right hon. and hon. Members want to speak on those issues. I just want to finish on the figure on the Order Paper for the estimates that we are debating. I apologise to the Minister if my lack of research has not produced the answer for me, so that I may have to wait until I read this debate in Hansard to find out the answer—or she may find that she has to write to me. I am slightly puzzled by what is on the Order Paper. We are being asked to support the granting of £482,077,000 to Customs and Excise and various other people,
      and payments in respect of Shipbuilder's Relief and the Customs and Excise National Museum.
      When I look into the departmental report for the same year, for the same class and the same vote—class XVI, vote 4—I am unable to find that figure. That may well be my own incompetence. I may have misunderstood something. We may have previously voted on the rest of class XVI, vote 4 on some other occasion and this money may be additional. However, that is not clear from the Order Paper or the departmental report, although it should be. It is an awful lot of money for the administration costs of a Department, and the departmental report's account of the class XVI, vote 4 suggests that the costs are significantly larger than those set out on the Order Paper. I hope that the Paymaster General is able to explain why that is.
      I know that estimates have received cursory attention over the years and that they are not taken terribly seriously, but it would be nice if the Government at least made an attempt to assist the House so that, when we looked at the Order Paper and the departmental report, we were able to work out what was going on. If those of us who take an interest in the subject cannot easily work out what is happening, what hope is there for casual observers or our colleagues who are not so interested in or anoraky about the subject of Government expenditure? How are they able to understand what the Government are trying to do with their expenditure? If there is an easy explanation for the difference, I shall be grateful to hear it. However, I hope that, in future, the Government will make their requests for Supply rather clearer.
      2.31 pm
      Liz Blackman: The wide-ranging inquiry that the Sub-Committee carried out was very interesting. It covered merger and closer working, the smuggling of alcohol and tobacco, and compliance. The subjects are inextricably linked to a degree, but, having given the matter a great deal of thought, I decided that, like other hon. Members, I would focus the main part of my speech on tobacco and alcohol smuggling.

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      Tobacco and alcohol smuggling damage our society from top to bottom in many different ways. It makes it difficult to secure the right level of Government revenue, can result in violence, poses a health threat and causes unemployment. We also have to pay out substantial sums for the detection, prosecution and punishment of offenders.
      What tipped the balance in favour of my decision to speak on this issue was a visit that I made to my local off-licence last week where I slightly inflated the profits that it made on wine. Its owner collared me and spent a long time explaining how much he had lost in the past eight years. He said that his profits were less now than they were eight years ago and he put that down predominantly to alcohol smuggling. He was being undercut by alcohol that had been smuggled into this country and which was being sold in other off-licences in the city where I live.
      The man to whom I spoke is honest, above board, pays his taxes and works hard. His off-licence is in a relatively affluent area where people have money to spend, but he was seriously worried by the damage that smuggling has caused to his small business. I imagine that the impact of smuggling is being replicated across the United Kingdom. Therefore, I decided to focus my remarks on smuggling.
      As hon. Members have already said, the scale of smuggling is immense, but it is very difficult to quantify. A rough estimate is that £2.5 billion was lost to the Exchequer in 1999 as a result of tobacco smuggling alone. We were told that that figure was 10 times more than the one for alcohol, but I doubt whether that is the differential between the two. The scale of the problem should not be underestimated, and we do not do that. In fact, I imagine that it is very difficult to assess its true scale.
      I am encouraged by the fact that there have been record levels of success in the detection of smuggled goods, but it is difficult to say whether the increased detection is a sign that we are beginning to crack the problems or the result of greater smuggling activity and an ever increasing culture of smuggling. We must bear that point in mind.
      The Sub-Committee considered the way in which Customs and Excise measured its performance. We discovered that its previous measures of performance did not fully gauge the impact of its efforts on overall smuggling volumes. In fact, many of the performance indicators were a moveable feast, because a number of variables changed so that it was not possible to make any comparison between one year and the next. Therefore, it was very difficult to assess whether Customs and Excise was doing well, or doing better.
      For example, in 1995–96, Customs and Excise announced that it had exceeded its target of securing 900 vehicles used to carry smuggled goods. However, that target did not appear again. In 1997–98, the number of detections made of smuggled goods yielding excise revenue of more than £10,000 was reported as a target and, in 1998–99, the number of major smuggling organisations dismantled or disrupted was used an indicator. Clarity and stable targets are necessary.
      I am delighted that Customs and Excise is to have a public service agreement—PSA—target focusing on the penetration of smuggled tobacco into the UK. That target
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      has been set higher in the first instance, which suggests that the amount of smuggled tobacco is predicted to increase in 2001–02 before it then begins to decrease. One could be cynical and ask whether we will win the battle, but I guess that the answer is, "Yes, we will." My confidence is not without foundation; substantial resources are being put in and there has been a shake-up in management structure and practices. Therefore, I explain the rise and fall in the target in those terms. Targets have been set for the number of tobacco smuggling gangs disrupted each year and for asset seizures. If those targets remain in place, we shall be able to compare how Customs and Excise is doing over the years.
      On tobacco smuggling, I support the Sub-Committee's recommendation that the Government should continue to protect the revenue obtained from tobacco duty. We have health objectives and we should not give in to criminal activity. Therefore, I was disappointed with the Opposition when, during consideration of the Finance Bill, they suggested that that duty should be reduced. That argument is disingenuous, particularly in the light of the evidence that the Sub-Committee took. Canada was cited as an example of a country where excise duty on tobacco had been reduced and smuggling had decreased as a result. In fact, one consequence was a switch to the smuggling of alcohol and Canada lost revenue.
      Another argument is that we harmonise tobacco duty with that in other European Union countries. However, duty-free tobacco from outside the EU is the problem. Italy and Spain, which have lower duties on tobacco products, still face a huge problem with tobacco smuggling. The only way that we could level the playing field is to get rid of the excise duty, but we, like many other countries, predicate our public expenditure on that revenue stream. We also have other objectives when we raise tobacco duty.
      Moving on to resources, I echo my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins), who said that the Opposition have selective amnesia on the Cinderella service that we inherited in 1997. Massive staff cuts had taken place and one of the first things done by my hon. Friend the Member for Coventry, North-West (Mr. Robinson), the then Paymaster General, was to stop 300 anti-smuggling officers being let go, as had been planned by the previous Administration—and, I understand, to prevent the loss of 1,100 VAT officers from the fundamental expenditure review.
      Nevertheless, the Treasury Committee was concerned that there was evidence of staff being switched to deal with more disruptive activity, but at a cost to other areas. Customs officials who came to my constituency office said that they felt that staff were being switched to more pressing areas, which left their flanks exposed. I am pleased that there is now a commitment of £209 million and nearly 1,000 new staff. I am aware that those figures are indicative, and depend on the outcome of the spending review. Will my hon. Friend the Paymaster General tell us, without giving anything away, how confident she is that that staffing level will come through? The appointment of 300 anti-smuggling officers has already been given the go-ahead. How are staff recruitment and training proceeding?
      I shall deal briefly with the £23 million for X-ray scanners. It would be interesting to know whether that money has come from the capital modernisation fund or

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      is new money contained in the extra £209 million. Those scanners are welcome and were chosen because of their effectiveness in other countries, where they have an extremely good track record. They will not be in place until November, when all the logistical and technical issues—such as installing them, training officers to operate them, how to select goods coming through and working out how to interpret the data coming across the channel—will have been resolved. There are logistical problems, but I am sure that the scanners will not arrive at ports without any of that preparation being done. I am, therefore, interested to hear my hon. Friend the Paymaster General's response to the issues raised by my hon. Friend the Member for Newcastle upon Tyne, Central.
      I have a couple of questions on the marking of tobacco products. I very much welcome the pack mark scheme. The Treasury Sub-Committee, however, recommended a date mark, as we thought that that was a good way of countering forestalling. My understanding is that that has been rejected, and I should be interested to know why as I am sure that the idea of countering forestalling has not been rejected. However, if the date mark scheme has not been rejected, has it been accepted and is it going ahead? Similarly, in their response, the Government said that they would consider the Committee's remarks on health warnings on packs and would come back with information. Will my hon. Friend the Paymaster General comment on that?
      When the Treasury Sub-Committee spoke to the head of Customs and Excise, he recognised that, although closer working by the Department was moving forward, perhaps much more needed to be done on internal linkages within the Department, as opposed to closer working with the Revenue. Customs and Excise has anti-smuggling teams and back cash teams which monitor retail matters, and also has shadow economy teams and excise verification teams. We were told that the operational policy directive was taking a holistic approach, but the way in which the different elements work with one another in the service is a management issue that needs to be further resolved. I welcome the appointment of the new head of Customs and Excise, as well as what he has already done. However, could we have information on whether he is making the matter a priority in his shake-up of the service?
      The Treasury Committee clearly flagged up concerns about the control system for holding and moving excise goods, which is Europe-wide and paper based, thus providing ample opportunity for abuse, diversion fraud and freight train smuggling. An example of those controls not being in place is the gap in the revenue collection on alcohol, which has been mentioned by several hon. Members and is being investigated. There are now EU agreements to improve and modernise systems, but that is a fairly long-term project. There are on-going improvements to the early warning system, which will continue to be made as a matter of urgency. How are they progressing?
      I was going to go into detail about concerns relating to a story that has recently hit the headlines on the gap of between £1 billion and £2 billion which resulted from fraudulent non-payment for wines and spirits between 1995 and 1998. However, I shall say only that I am pleased that that will now be the subject of an independent inquiry. I agree with the article which said that as well as
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      the judicial element, there must be strong commercial input in looking at the problem and serious re-examination of control and information systems.
      I shall touch on the issue of compliance. If the problem of non-compliance is simply about the complexity of having to comply, that is a concern for Government, as it encourages people into non-compliance. Of course, if someone sets out to be non-compliant, that is another issue. However, when systems are complex, telephone hotlines are not available, leaflets are inaccessible and explanations are not given, it is much more difficult for businesses to comply. It is revealing that, in the last 10 to 20 years, there have not been any studies on Customs and Excise compliance costs, although a survey is now planned. The Treasury Committee recommended that the Government should look at a targeted approach to delivering reduced costs, which is now going ahead. Indeed, it needs to go ahead with speed, as that is a move towards helping businesses to be compliant.
      The huge challenge that the Government face in attacking and reducing smuggling includes tackling within Customs and Excise the serious problems associated with investigating and successfully prosecuting smugglers. I welcome the Butler report on that, and it is healthy that those problems are being faced. I hope that subsequent to the inquiry on the matter, recommendations will come before the House.
      I welcome also the Cabinet Office report, "The Proceeds of Crime", which is another piece of the jigsaw in tackling the problem of bringing to book people who are making a considerable amount of money and causing a great deal of misery to our society. For those Members who have not read it, I can say that the report is still at the consultation stage, but it proposes that we extend civil forfeiture powers to strengthen the existing powers of seizure under the Drug Trafficking Act 1994. That would include not only cash linked to drugs crime, but other means of payment such as travellers cheques and bearer bonds. The report also recommends the setting up of a national confiscation agency to work with Customs and other law enforcers on cases that are not pursued by the civil route.
      I am sure that there will be a great deal of debate about that in the House, if and when the proposals are included in legislation. However, the following figures are shocking: from 1987 to 1996, only 157 drug trafficking orders for over £100,000 were made, but there were 45,000 convictions. There is a gap between making the punishment fit the crime and what has been happening.
      I end where I started, by saying that I am very supportive of all the measures being taken by the Government on this ever increasing problem, which has an impact on many different issues, including unemployment, which I have mentioned. Not least is the impact of cheap alcohol and tobacco on children.
      2.53 pm
      Mr. Peter Brooke: It is a great pleasure to follow the hon. Member for Erewash (Liz Blackman), as it is always a pleasure in such debates to follow a member of the Select Committee that has produced the report. Those of us who are in attendance at a debate on a Select Committee report, but who are not members of the Committee,

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      inevitably have a slight sensation of being a Jehovah's Witness who has accidentally stumbled upon a coven. However, I declare an interest, having served for two years in the mid-1980s as a Minister answerable to the House for Customs and Excise—a task that I hugely enjoyed.
      On my first day as Minister, I said that I should seek to get out of the Treasury once a month to visit Customs operations. My principal private secretary, who was a Customs official, and who I am delighted to say is now a commissioner member of the board of Customs and Excise, was sure that we would not achieve that, but we achieved visits once every six weeks or so, and 17 visits in all, so I have some knowledge of, and considerable respect for, Customs and Excise, at least in those years. I acknowledge that those years preceded the smuggling bonanza of the past decade.
      Customs is an ancient service and existed in a privatised form long before it was a public service. It practised in the City of London, and in the port of London in particular. Chaucer was a Customs officer—it is a much older service than the Inland Revenue.
      In the light of the Select Committee's comments on Customs' need to be more user friendly towards business, it is perhaps worth repeating the episode in the mid-14th century when Edward III, anxious to restore Westminster's economy after it had been ravaged by the shift of the Government to York in the context of the Scottish and Welsh wars, decided that the office for extracting imposts on all exports of wool should be moved from the City end of my constituency to the Westminster end, rather as more recently the French customs decided that all Japanese videos should enter France through Poitiers in the heart of that country. It will not surprise the House that, within a dozen years, 14th-century market forces had moved the taxing point back to the City.
      If I express some loyalty to Customs and Excise in these remarks, it will not be the first time that I have done so. During the 1987 general election, my noble Friend Baroness Thatcher insisted that a Treasury Minister should be present at all her London press conferences, and that hazardous role fell largely on me because of my constituency. I say "hazardous" because the public prints of the day reported that, in one press conference answer, the Prime Minister criticised Customs and Excise for its treatment of small business and appealed to me for support on the platform. I had to say that I could not follow her the whole way because it was within my certain knowledge that Customs and Excise could visit each small business in the land on average only once every eight years for an inspection.
      Given the Select Committee's new criticisms of Customs and Excise for business user-unfriendliness, I can see that the then Prime Minister may well have been more right than I had surmised. I did not so damage my standing with her that she resiled from appointing me chairman of the Conservative party six months later, but in reflecting on this debate, it has occurred to me that she may have decided that it was better to have me running Smith square than answering for Customs and Excise in the House.
      At any rate, that move ended any responsibility that I had for Customs and Excise, to which my most notable contribution was the resolution of the Euro-tunnel treaty
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      problem. We had to resolve the dilemma that French customs officers on trains entering the tunnel would still be carrying guns when the trains left the tunnel at our end, whereas British customs officers would not be carrying guns. Our resolution, accepted by both sides, was that French customs officers could carry guns on British soil, but if they wished to use them, they must apply in writing to the chief constable of Kent. One indirect contribution was that I chaired, from 1988 to 1989, the Government working party to set up the Government data network, initially between four Departments, of which Customs and Excise and the Inland Revenue were two.
      I want to dwell on three issues: first, smuggling; then, briefly, the climate change levy, if that is in order; and, finally, the Select Committee's proposals for merging Customs and Excise with the Inland Revenue.
      On smuggling, I called in 1991 on my successor at Customs, the then Minister of State, to discuss the plans for the introduction of the Single European Act in 1992 in the context of smuggling, and particularly the smuggling threat to Gallaher's factory in Northern Ireland, where I was then serving in government. I am against politicians saying, "I told you so," but I have to confess that after hearing of the preparations of Customs and Excise in 1991, I did not think that they were likely to be wholly effective, and I have not been wholly surprised by the turn of events since. In all honesty, I should, following various speakers in the debate, acknowledge that I was genuinely surprised by the reduction in Customs and Excise staff numbers in the previous Parliament, given the tasks that it was being asked to address, but then I was no longer a member of the Government.
      Anyone interested in smuggling naturally has a sense of history in general and of the 18th century in particular. It was Pitt the Younger's triumph in his fight against smuggling that he characteristically went for essentials. His central problem was that the excise duty rates were so high that smuggling enjoyed considerable public respectability, as evidenced in Kipling's lines:

      Five and twenty ponies

      Trotting through the dark—

      Brandy for the Parson,

      'Baccy for the Clerk;

      Laces for a lady, letters for a spy,

      Watch the wall, my darling, while the Gentlemen go by!

      I hold no brief for espionage, but otherwise those lines catch the flavour of the age.
      Pitt's solution, of course, was to slash excise rates, with the wholly benign result not only that smuggling ceased, but that the Treasury's revenue rose exponentially, as it did when my noble Friends Lord Howe of Aberavon and Lord Lawson of Blaby cut the top rates of tax two centuries later.
      Of course I understand the Government's health arguments. I do not want to give the impression that I have not followed them in this instance, but I also followed the debates on the Finance Bill in Committee on the Floor of the House two months ago. My right hon. Friend the Member for Wells (Mr. Heathcoat-Amory), the shadow Chief Secretary to the Treasury, and several other hon. Friends drove an Exocet worthy of Pitt through the camouflage that was advanced by the Government in their arguments for joined-up government. Those arguments are a classic case of the school report stating, "The improvement in your son's handwriting has revealed alarming deficiencies in his spelling."

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      The Select Committee report and today's debate are invaluable searchlights on this major crux in the efficacy of Government policy. However, in constrast to the Select Committee's findings on Customs and Excise secrecy, the Select Committee on Northern Ireland Affairs, which examined Customs and Excise witnesses in the context of petroleum duties and consequential smuggling into Northern Ireland from the Republic of Ireland, gave us clear evidence, although I admit that that was under the leadership of my former principal private secretary, which may or may not have been a coincidence.
      My remarks on the climate change levy will take the form of a single quotation. The other day, the Financial Secretary to the Treasury gave me a very civilised written answer on the levy, to what would have been an oral question, had it not fallen too low in the ballot. I have, however, heard him answer oral questions on the levy several times and every time, he prays heavily in aid my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer). It is too long a quote for an oral question, but I offer the Financial Secretary, in his understandable capacity today as Banquo's ghost on the Treasury Bench, my right hon. Friend's preface to a question to the Prime Minister on 12 April. He said:
      When I asked the Prime Minister some time ago what the effect would be on Britain's emissions of the moratorium on gas-fired power stations, he did not know. His right hon. Friend the Secretary of State for the Environment, Transport and the Regions thought that the effect would be so small as to be laughable. It turns out that the effect is, in fact, so large that it countervails the whole effect of the climate change levy.—[Official Report, 12 April 2000; Vol. 348, c. 360.]
      Those do not sound like the words of the Financial Secretary's natural ally.
      I come to the merger. I have read the Select Committee report and have heard the arguments of its members today. I have also read the Government's response. In her letter accompanying the response, the Paymaster General states:
      there are also important differences between the roles of the two Departments, which require the development of different skills set in terms of assurance and collection. Indirect taxes are transaction-based taxes, requiring real-time identification of transactions with near-simultaneous and continuous collection. Direct taxes are periodic and accounts based, generally collected in arrears.
      She goes on to expand on the generic particularities of indirect taxes to the same effect in arguing the Government's response—that they were not in favour a merger.
      The Select Committee report closed with a single sentence in heavy type at the end of paragraph 133, which stated:
      In our view, one of the main benefits of the merger of Customs and Excise and the Inland Revenue would be to effect a shift in the culture of VAT and excise collection so that it was more attuned to the needs of business.
      It is not for me to second-guess the Select Committee's final sentence, not least because it took the evidence, but I doubt whether the Select Committee would have ended the same way 15 years ago. In that era, the distinction between the two agencies was that the Inland Revenue was more deeply into precision, while Customs and Excise, because of its permanent interface with business, was more into rough and ready agreements with business by which it would seek to collect the broad necessary tax arising from legislation while making its collection convenient for both sides. Because of the longevity of
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      both services over centuries, I should be surprised by so rapid a change in 15 years, and my instinctive objection to the proposed merger derives from the different cultures.
      I do not know how many members of the Select Committee have been involved in the process of change in large organisations, but I had some experience of that in the margins during 18 years in the private sector, and it is a genuinely challenging task. Not least because of my involvement in helping to set up the Government data network, I am of course wholly in favour of further exploration of potential collaboration, but at this juncture I would need a lot of convincing to support a full-scale merger. The Select Committee report, however, has been eminently worth while.
      Several hon. Members rose—
      Mr. Deputy Speaker (Mr. Michael Lord): Order. Before I call the next hon. Member to speak, I remind the House that several hon. Members are trying to catch my eye. Not much time is left and, unless contributions are considerably shorter, some of them will be disappointed.
      3.6 pm
      Mr. David Kidney: The contribution of the right hon. Member for Cities of London and Westminster (Mr. Brooke) is all the more welcome because he is not a member of the Select Committee on the Treasury. Because some hon. Members who want to speak are also not members, I shall keep my remarks brief. I want to discuss closer working, smuggling and the Doran case.
      I recognise the contribution that the tens of thousands of staff make to the work of Customs and Excise every day. I am sure that they seek satisfaction in doing their job well and in the knowledge that they are doing some public good by collecting moneys that will be spent on this country's defence, effective public services and keeping out illegal products and substances that we would prefer not to be here.
      I have often noticed how comfortable politicians are in talking about structures. That is a dangerous thing for us to do; the important matters are the processes involved and the results. The proper taxes must be collected effectively and as politely as possible from honest and hard-working people. Those who have to pay their taxes must find the service that they receive polite and efficient, and they must be regarded as individual personalities, not as numbers or organisations. It is important to focus on that in any debate on how our tax collectors work, so it is legitimate to ask why two organisations collect our taxes and why there cannot be one.
      I should like to defend the Treasury Sub-Committee from any suggestion that we became obsessed with structure and forgot to consider the delivery of the service, first by reminding hon. Members that the investigation into Customs and Excise followed a similar investigation a year before into the Inland Revenue, so we have thoroughly considered both tax collection organisations. Secondly, as the hon. Member for West Worcestershire (Sir M. Spicer) said, we closely considered the experience of Canada, which has merged all its tax collection functions into one organisation, not to try to save money—the evidence showed that no money was saved—but to get the service right, to collect the right amount of tax in a way that is acceptable to the public and to be

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      customer friendly in carrying out such duties, thereby reducing the burden on those who have to pay their taxes, especially the costs to businesses, which, of course, have other priorities.
      The Government response to the report states that closer working is a good way in which to ensure that the service provided by our tax collecting organisations is effective, and to achieve the desired results. We on the Treasury Sub-Committee found that in the 1990s, the organisations may have said that, but they did not practise it. The absence of a closer working director until last year has already been mentioned. Equally, there was no system to monitor and evaluate closer working.
      I had the impression that the Paymaster General had come to the system years after it had been set up and found that she could not provide a proper assessment or evaluation of it because the systems had not been in place to provide her with the information needed to make that assessment. In the Government's response to the report, she tells us that the intention is now to ensure that the system has proper aims, such as closer working, and proper monitoring and evaluation in future.
      Nevertheless, I still believe that closer working will not deliver on the agenda that we have all talked about today. I still believe that it is unambitious, and anyone who reads Lord Grabiner's report will see that we need a closer working programme much wider than the one in place. In April, the Committee received a letter saying that criteria for closer working would be established, but we are still waiting to hear what they are, and I am not even sure about what is happening with the budget for closer working. The Committee has just received a letter from the Treasury that talks about transferring closer working budget money from Customs and Excise to the Inland Revenue, but it is not at all clear why the Government are playing fast and loose with that money, which is supposedly important.
      Whether or not a merger ever happens, we could look further at steps along the way to closer working, such as more co-locating of closer working teams, a small amount of which takes place. Why do we need two separate boards for the two organisations? Why could there not be one board for Customs and Excise and the Inland Revenue, even if they continue as two organisations for tax collecting purposes? Again, the Government have travelled along that road a little by having directors from each board serve on the other.
      It is important to remember the distinction between the different kinds of smuggling, which no one has drawn in the debate. Different things are smuggled—ranging from human beings to tobacco, alcohol and drugs—and there are different smuggling operations. A lot of people listening to the debate may simply have in mind the so-called white van trade in which people from this country visit another European Union country with lower tax rates, fill up the van with stuff that they claim is for their personal use, transport it home and sell it commercially much more cheaply than the local off-licence can sell such goods to its customers, thereby doing the off-licence out of business and possibly its livelihood.
      The white van operation is not attractive or desirable, but it is not the most prominent kind of smuggling. Much more significant is so-called diversion fraud, which was
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      touched on in a report in yesterday's Financial Times. Goods leave this country, supposedly for export—therefore, no duty is payable—but, instead of going out to the claimed destination, they are diverted back to this country's markets to be sold without duty ever being paid. As we read in the report, and as has been mentioned by many hon. Members, billions of pounds can be lost. Also, goods in container lorries are smuggled into European Union countries from third countries such as Russia and China, where no duty or small amounts of duty, are paid, and sold without EU duty being paid.
      Like many hon. Members who have spoken, I disagree with the idea that cutting duties would reduce smuggling. Most smuggling involves organised criminals—people who pay no duty at all—so unless we reduce duties to zero or close to it, we shall never be able to remove the motive to continue that business. We should therefore consider only the white van trade and whether harmonising duties in this country with those in other EU states is desirable. That would be an interesting debate.
      I refer to the submission made to the Cabinet Office by the Public and Commercial Services union—the trade union that represents most Customs and Excise staff—on how, for a small outlay, the Government could significantly improve the detection and prevention of illegal drugs imports to this country. I support that submission and hope that the Government are able to give it some attention in the spending review announcement that will be made soon.
      I refer also to the case of Doran and the Government's response to the report by Judge Butler, which my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins) has already mentioned. In that multimillion pound drug smuggling case, the alleged perpetrators were prosecuted by Customs and Excise. However, the case collapsed and the accused walked free from court. As a result of comments made by the trial judge, an investigation was set up as to what went wrong and why the case collapsed. This is a sorry tale of poor preparation of the prosecution case, the misuse and abuse of investigative powers and a lack of total frankness and disclosure by those involved on the prosecution side.
      As a former solicitor, I was horrified to see that some of Judge Butler's recommendations are very basic. For example, he said that all cases must be
      fully and properly prepared for presentation in court
      and that a barrister instructed by Customs
      must be provided with a formal set of instructions.
      I could not imagine a barrister not receiving a formal set of instructions and a properly prepared set of papers, even in the slightest case I ever dealt with. I stress that this case involved a multi-million pound prosecution.
      The report is worrying, so no wonder the Government have agreed to set up a further investigation as to whether Customs and Excise should lose its status as a prosecuting authority. However, I must point out that my hon. Friend the Member for Newcastle upon Tyne, Central was wrong to say that Customs and Excise did its best not to tell us about the Doran case. I asked questions about it when we had Customs and Excise staff in front of us, but our own Clerk was worried as to whether the sub judice rule still applied and stopped the line of questioning. Customs and Excise staff made the point that they detect and prosecute many cases each year involving smuggled goods of great

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      value. Those prosecutions are usually successful and those who are successfully prosecuted receive severe sentences. The picture is not gloomy—indeed, it is usually one of success—but this case is worrying.
      Mr. Cousins: Is my hon. Friend concerned, as I am, that the Doran case is not the only recent one to involve large sums of money and a Customs prosecution that collapsed? A similar case in Portsmouth and a trial in Middlesex Guildhall both had a similar result, so perhaps we should consider not simply the issues involved in the Operation Steeler case, but a more widespread and fundamental problem.
      Mr. Kidney: Yes, I am concerned that the public hear that people who have done terrible things have walked free from court and that Customs and Excise staff, who did their job properly to catch those people, see that an unsuccessful prosecution is the result of their work. That is worrying, which is why the investigation is welcome, and why the Government's decision to consider whether Customs and Excise should continue to be a prosecuting authority is the right one. I agree with that.
      The Sub-Committee's work in considering the various agencies of the Treasury is immensely useful to us and to the agencies and organisations themselves. I am pleased that we are to go back to Customs and Excise later this year to see how it is getting on, not least with closer working.
      3.18 pm
      Mrs. Ann Winterton: In view of the time, I shall be as brief as possible and shall not touch on several issues that I should have like to have discussed, such as alcohol and tobacco smuggling and the new problem with petroleum, to which my right hon. Friend the Member for Cities of London and Westminster (Mr. Brooke) referred and which has to be tackled. I shall leave them on one side as they have been well explored.
      In briefly congratulating the Treasury Sub-Committee on its report, I shall take a slightly different tack. I welcome the opportunity to debate the work of Her Majesty's Customs and Excise on tackling the smuggling of drugs. It plays a vital role in the detection and prevention of drug smuggling in order to reduce access to drugs in Britain.
      Front-line customs officers undertake a thankless task, dealing with verbally abusive and often aggressive travellers. Routine searches can lead to disturbing and distressing discoveries, as was tragically evidenced on 12 June at Dover. I have observed that Customs officers undertake their work efficiently and effectively, and I pay tribute to them for the role that they undertake on behalf of us all.
      With regard to the performance of the Department in relation to drug smuggling, its efficiency is clearly demonstrated by the Department's increased use of intelligence-led operations. Customs and Excise has been successful in applying its specialist skills to the fight against commercial smuggling. Between April and December 1999, the Department disrupted or dismantled 35 smuggling organisations trafficking in class A drugs, and was on course to meet its public service agreement target of 60 organisations by March.
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      The Department was also on course to meet its target of preventing class A drugs with a value of £1.2 billion from entering the UK during 1999–2000. In 1998, the Department seized 88.3 tonnes of drugs, including a rise of more than 25 per cent. in the amount of cocaine and amphetamines seized in the previous year.
      However, as has been mentioned in the debate, the number of successful prosecutions for drug smuggling has fallen significantly in recent years, and average sentences have increased by just one year to five and a half years. The new data collection system will give us a better understanding of the success of the 4,000 prosecutions brought by Customs each year, but serious questions have been raised recently about the Department's ability to prosecute offenders.
      Following Judge Butler's inquiry into the collapse of the case against Brian Doran and Kenneth Togher for smuggling cocaine with a value of £34 million, his report last month found that mistakes were made by the Customs investigation team and the Customs solicitors department. Judge Butler found that the solicitors department is "simply not sufficiently resourced". He reported:
      These officers I saw I would describe as hard working and dedicated…for the kind of pay most lawyers would describe as derisory.
      A review of the Department's role in prosecutions and the possibility of transferring customs cases to another prosecuting authority is due to be completed in October this year. I ask the Minister for assurances that the lessons of the report will be learned.
      A wider issue of resourcing gives rise to concern. The problem of drugs in Britain continues, and their availability is not declining, despite increasing seizures by Customs and Excise. Home Office research shows that the street price of most types of drugs continues to fall, yet in 1999 the estimated street price of Customs cocaine seizures amounted to more than £250 million.
      Customs officers face diverse, more organised and more sophisticated challenges in suppressing the flow of illegal drugs. The Department's estimated expenditure on drugs enforcement in 1999–2000 is £209 million. However, the number of staff allocated to tackle the problem has decreased. I accept that intelligence work is crucial to the success of operations, but there is no question that front-line resources are needed to support the intelligence services.
      The Public Accounts Committee took a detailed look at the Department's role in dealing with the drugs menace. In its report in November 1998, the PAC concluded that, while intelligence-led investigations may provide a deterrent to some commercial drug smugglers, it is
      nevertheless important to maintain a sufficient anti-smuggling presence at ports and airports to provide a perceived risk of detection, particularly for smaller-scale and opportunist smugglers.
      I acknowledge that staffing levels in the service declined under the previous Government. The level of Customs and Excise staffing has fallen further since 1997, particularly in intelligence and anti-smuggling. I refer the hon. Member for Erewash (Liz Blackman) to page 26 of the departmental report, where the staffing statistics clearly show that there were 14,364 staff years in 1997–98, when we left office, and that the forecast plan for 2001–02 is for 13,482 staff years. There it is, in black and white.

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      Front-line anti-smuggling officers are engaged in efforts to protect society against drugs, firearms, explosives and paedophile material. The Department believes that it can make more of an impact by deploying teams of anti-smuggling staff to different ports and airports. However, the PCS union reports that front-line staff feel a mounting frustration because more could be done to stop the tide of drugs entering the country.
      The PCS is aware that drug smugglers switch their resources to where they think there is the least risk of getting caught. With a number of smaller provincial airports and ports not being staffed on a constant basis, the union believes, and I agree, that there are increased opportunities for smugglers. A MORI poll commissioned in 1999 revealed public comments about the lack of adequate staffing at smaller airports and harbours.
      The PCS estimates that an extra 500 front-line officers would allow the Department first, to respond more strategically to known risks; secondly, to invest more resources in testing medium and low-risk traffic in order to give an assurance that that traffic did not pose a significant threat; and thirdly, to enhance the deterrent effect provided by a visible uniformed presence in preventing the import of drugs and reassuring the public.
      The PCS expressed concern that the Department was underestimating the effectiveness of additional staff, and that the reduced level of resources was not a sufficiently considered response to the threat from the importation of drugs.
      The lack of staff is deeply worrying. It reveals a fundamental misunderstanding of the drugs problem. In their White Paper, the Government identified four issues that needed to be tackled: first, helping young people to resist drug misuse in order to achieve their full potential in society; secondly, protecting our communities from drug-related anti-social and criminal behaviour; thirdly, enabling people with drug problems to overcome them and lead healthy and crime-free lives; and fourthly, to stifle the availability of drugs.
      The final aim relies heavily on the ability of Customs and Excise to reduce the amount of drugs coming to, and crossing, the UK, through seizures and by disrupting trafficking organisations.
      The crucial balance is between addressing supply issues and demand issues. The Government have pledged to tackle the supply of drugs,
      shifting the emphasis from dealing with the consequences of drug misuse to prevention of that misuse.—[Official Report, 25 May 1999; Vol. 332, c. 162]
      However, although they are ploughing £217 million of new money into the delivery of their strategy, all that money is allocated to dealing with the demand side. Customs and Excise, the major player in achieving the fourth strand of the Government's strategy, has not been allocated sufficient extra funding, despite the Department's track record in delivering increased seizures cost-effectively.
      Initiatives to tackle the demand for drugs must be combined with initiatives directly to stifle drug availability in Britain. The PCS believes that if more resources were allocated to anti-smuggling staffing, the amount seized would increase substantially. I accept that additional staff for Customs will not alter availability
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      unless demand is adequately addressed, but the funding designed to deliver the Government's aims in relation to drugs would be much more effective if it encompassed efforts to stem the problem at its root.
      The focus on the recovery of hard drugs is also a worrying factor. In 1998, the seized quantity of cocaine rose, but there was a 28 per cent. fall in the quantity of seized cannabis resin. The shift of resources away from so-called soft drugs is in line with the Government's strategy, but there are downsides. The PCS has warned that the decreasing seizures of soft drugs is demoralising—it must be; they are, after all, illegal—undermining what is meant to be a tough Government stance against drugs. The PCS also warns that more sophisticated smugglers are exploiting the move away from targeting soft drugs by concealing hard drugs within consignments of soft drugs.
      The work of the Department must be seen in the context of the overall anti-drugs strategy. Customs and Excise cannot work in isolation, and it must be resourced adequately to play its part fully and effectively. Visibility and effectiveness are not mutually exclusive. Intelligence gathering is important, but the Government should not underestimate the effective deterrent that visible customs officers provide to smugglers. However, the PCS considers that the existing resources are too low to deliver both options effectively.
      The Department is rightly expected to deliver higher targets in order to prevent a greater amount of drugs from reaching the United Kingdom, but consideration must be given to the staffing levels which can best achieve those aims. Concerns have been raised by members of the public, the Public Accounts Committee and the PCS.
      I urge the Minister urgently to examine staffing levels and to provide additional resources to stop drugs reaching our streets.
      3.31 pm
      Mr. Nick St. Aubyn: We have heard a great deal this afternoon from Labour Members about the Government's crackdown on evasion and the increasingly oppressive regime but, perhaps typically of this Government, we have heard nothing about the principles of Government by consent, which must include taxation by consent.
      There is increasing evidence not only that the general tax burden is reaching a level that people do not accept is fair and just, but that the level of taxes being imposed, particularly in this area, is at the heart of the problems of collection that have been described this afternoon, because more and more people feel that the amount being claimed from them is grossly unfair.
      At the back of the Select Committee's report is an account of the evidence given by the Tobacco Manufacturers Association, in which it points out that the charge on a packet of 20 cigarettes had risen from about £1.50 a packet in 1993 to £3 a packet by January 1999. It points out that the differential from the average throughout the other EU member states has risen from less than 50p to more than £1.75. The result is that, in real terms, the amount of revenue coming from tobacco taxes since 1992 has fallen—a doubling in the tax on tobacco and a fall in the revenue yield.

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      We heard from Labour Members how that was partly due to the white van phenomenon, but, evidently, the big criminal element has found that the profits to be made at those much higher levels of taxation are so attractive that it has decided to become involved. By raising taxes to such a high level, the Government have made an opportunity for criminal activity, which excessive taxation has been proved to create many times before.
      If we are to have Government and taxation by consent, we must observe the proper way in which taxation is to be decided and debated. It was striking in the course of the Finance Bill Committee, on which some of us recently served, that the Government refused to give us the pertinent information from the Taylor report when we came to debate the level of tobacco duty.
      Before we consider that, it is worth bearing in mind the fact that, if the Government had succeeded in maintaining the level of duty at the level they inherited, the yield from tobacco duty in the first three years of this Parliament would have been £3 billion higher than was actually achieved. That is £3 billion which might have gone into the health service or to meet the other needs of our society but which has been lost as a result of the Government's failure to follow a successful strategy in achieving not just the highest rate of tobacco duty, but the optimum level.
      As the Select Committee pointed out, it, too, was disappointed that the Taylor report was not made available; that several key witnesses told it that they had not been consulted by Mr. Taylor; and that the advice tendered by Mr. Taylor was apparently personal and confidential to the Chancellor. The Committee concluded:
      We consider it unacceptable that the Treasury should commission a review of an important area of Government policy…without allowing Parliament access to the review's conclusions.
      The only person who had access to the conclusions was the Chancellor, who is described by one of his colleagues in the Government in today's Daily Express as being "power-crazed" and "bonkers." Should we really allow such an important report to be spirited and squirrelled away by the Chancellor to be interpreted purely in terms of his view of the situation, rather than having the type of open and clear debate that is needed if we are to develop an effective policy—not, as I say, of having the highest level of tobacco duty in Europe or anywhere in the world, but of having the optimum level, which would yield more revenue to spend on the services where it is needed?
      3.36 pm
      Dr. Peter Brand: I am not accustomed to speaking on Treasury matters, but I was struck by the Select Committee's report, especially paragraphs 59 and 87, and the Government's response, which reflect the concern expressed today that we should have enough front-line officers to deal with smuggling. Clearly, we welcome the Government's initiative, particularly in concentrating on tobacco smuggling. The Government's response to the Select Committee's concern was the £209 million and the 1,000 extra staff to be employed, and that is welcome.
      I have a particular interest in smuggling since my constituency has 60 miles of coastline, five harbours, two airports and many large houses which were built with profits from smuggling. In the midst of the 18th century, we employed 120 Customs officers, but now we have only 3.5. Those 3.5 people do an excellent job because
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      they are equivalent to community policemen. They work through harbour-masters and yachtsmen, and people give them soft evidence and intelligence, so they have been extremely successful. We are a high-risk area, but luckily, a low activity area because we pick matters up before anything happens.
      I am concerned that we have lost two of our allocation of 3.5 Customs officers to serve permanently at the container port in Southampton. I have made some inquiries and the same sort of thing has happened elsewhere on the south coast. There has been a 60 per cent. reduction in the Hamble and further down the coast.
      It is important that yachtsmen see Customs officers around. Not only do they have a deterrent effect: law-abiding yachtsmen expect to be able to make easy contact with a Customs officer to pass on matters of concern or strange patterns of behaviour informally, without having to telephone an office and make a formal complaint. It is important that Customs and Excise should not lose sight of the invaluable role played by the local Customs officer, as opposed to the specialist teams that can be drafted in.
      I have written to the area controller, and he assures me that the work will still be done, with specialist teams being drafted in when necessary. But they will arrive by ferry, and by the time they are on the ferry everyone will know they are coming. That is not the same as having people in the locality who are integrated with the local community and who have a visual presence. I urge the Minister to consider the policy, which has served the police badly. It is the equivalent of taking policemen out of the community and sticking them into cars and specialist teams.
      If we go along that route, we may see good performance indicators, but in a way such indicators are those of failure. They are signs that we have virtually allowed smuggling to occur, after which we make arrests. Deterrence, and getting the community on the right side, is the way in which a stretched resource can be used most effectively.
      3.41 pm
      Mr. Oliver Letwin: We have had an interesting debate on a most interesting report. Apart from anything else, the debate has brought out the deep truth of a statement that is lodged at various parts of the report. It has not been brought out with particular prominence, but it is there. It is that the range of activity within Customs and Excise is positively daunting. I think that the Select Committee observes that it sees no argument against a merger because the range of activity within each of the two bodies—the Inland Revenue and Customs and Excise—is greater than the difference between the two bodies.
      As my hon. Friend the Member for Congleton (Mrs. Winterton) said, in one area of its activities Customs and Excise is a sort of border police force, while in another there is a group of people raising VAT, a standard tax. I marvel at the fact that Customs and Excise can do anything at all given the range of its activities, and that anybody can run it. I hope that it will not be taken by members of the previous management as too great an indictment of their activities that hon. Members criticise them. I doubt whether their critics would have been able to do a better job than they did. We impose on them an incredibly difficult task.

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      We have a real problem on our hands, and the Select Committee has provided a valuable service in drawing attention to some parts of it. I wonder whether the full scope of the problem emerges from the report. I wonder also—I shall suggest that it is not the case—whether the full scope of the problem arises from the operation of Customs and Excise. I think that a great part of it is attributable to us in Parliament—to government and policy rather than merely to operations.
      I do not know whether a merger is appropriate. There has been a long-running debate. The members of the Treasury Sub-Committee have investigated the matter, under the chairmanship of my hon. Friend the Member for West Worcestershire (Sir M. Spicer), and on the whole have suggested that merger would be a good idea. The most important point that the Sub-Committee makes is that neither it nor we are in a proper position to debate the subject: the findings of the one serious investigation that has been conducted by those who are in the know on the inside of Whitehall have not been revealed.
      It is a tribute to the tact of my hon. Friend and his Committee colleagues that the report is quite cautious in the way it describes the matter. I think that the failure to reveal the findings of the investigation amounts to something close to contempt of the House. What I take to be a serious piece of administrative investigation was called for by a responsible body, a Select Committee, and it was not yielded up.
      I am surprised that the Sub-Committee, through the Chairman of the Select Committee on the Treasury, is not seeking to have the House demand it. I understand that the House would be in a position to make it a contempt not to yield it up. I think that as a general principle our Select Committees are still too timorous about their demands on Whitehall. I understand the constraints within which they operate, but I think that the report should definitely be before us.
      It may be that there is some reason why the Government are not willing to yield up the report, even after the embarrassments of the debate. If that is the position, there is only one proper solution, and that is to commission a new full-scale inquiry on the basis of an open book, so that everyone knows what is being done, and to publish its findings. I suspect that until that is done we will not know whether there is merit in the Select Committee's intuition that there should be a merger. We maintain an entirely open mind on that issue until a full-scale inquiry has been conducted.
      If the Paymaster General is not willing to yield up the earlier report because, as the Select Committee speculates, it is inadequate, or, indeed, for some other reason, I hope that she will say that she will commission a full-scale and open inquiry. We would then at least have the basis for a proper debate.
      The scale of the smuggling problem has emerged clearly in the debate, and it is extremely serious. My right hon. Friend the Member for Cities of London and Westminster (Mr. Brooke), with characteristically brilliant allusiveness, took us back through the ages and reminded us that smuggling is not a new phenomenon. It is not since I was a child that I have heard the Kipling verse, but my right hon. Friend is correct to say that people were concerning themselves with smuggling long ago. I think
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      that I can slightly outdo him in historical reach, by saying that smuggling was a very serious problem in Anglo-Saxon times. In those days the witan much concerned themselves with the subject of smuggling. So we have about 1,000 year's worth of experience of serious smuggling.
      The fact is that the scale of the smuggling catastrophe—I use that word advisedly—has reached proportions which in some parts of Britain threaten the foundations of ordinary society. I am not speaking of loss of income. Customs and Excise costs about £1,000 million a year to run and it raises about £100,000 million a year in tax. It loses about 2 per cent. of that in forgone revenue—I hesitate to say this, but
      Dawn Primarolo: It is a pretty good record.
      Mr. Letwin: As the Paymaster General says from a sedentary position, it is a pretty good record. If we asked throughout the world how many people manage to collect that much money spending that little money and with that amount of loss, the answer would be not many.
      The mere loss of revenue is a trivial item compared to the effect of smuggling on ordinary society and ordinary people in many areas in the southern part of Britain, and increasingly throughout the rest of Britain. The relationship of government to the governed and the acceptance by the governed of the legitimacy of things that we do in this place and which government imposes upon them, is a critical component of the coherence and stability of our society. It is bad enough when professional crooks bring in large loads of smuggled goods, but perfectly ordinary people are going abroad and, as a matter of course, buying stuff, not declaring it, giving it to friends and relatives or selling it openly in pubs. One such case has been mentioned and that could be replicated by hundreds of thousands of others.
      I do not say that the activity has gone so far as to constitute a social crisis, but we have the beginning of the end of the proper relationship between governed and government, and that is a catastrophe. We used to have a country in which we prided ourselves on that relationship working extraordinarily well. We used to smile ruefully about people in Italy who did not pay their taxes. We thought that that was not the sort of thing that happened in Britain.
      We now have on our hands enormous criminal activity by perfectly ordinary people who otherwise lead respectable lives. That is a very bad situation. I do not believe that any amount of extra effort by Customs and Excise, machines or anything of the kind—my hon. Friend the Member for Guildford (Mr. St. Aubyn) was right about this—will solve the problem. It can be solved only by trying to redress in some way over time—and with all the difficulties that this implies—the great gap between our levels of excise and those in nearby ports. Otherwise, the problem will remain and no amount of effort by Customs and Excise officers will cure it.
      Liz Blackman: How does the hon. Gentleman answer my point that, no matter how great the reduction in tobacco duty, cheaper goods, or goods with no duty, will always be available, and big business will ensure that they fill any gap?
      Mr. Letwin: It is obvious that I did not make myself clear. I accept that organised criminal smuggling will

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      probably continue, whatever the level of duty. Smuggling has probably existed for as long as time. However, the propensity of hundreds of thousands—perhaps millions—of otherwise respectable citizens to engage in criminal activity, which is the social disaster that I am describing, arises almost exclusively from the discrepancy in excise rates. That should be a matter of mutual anxiety. It is not a party political issue. We should all be concerned about what we do to ordinary people. I accept the point about big business smuggling, but it was not my point.
      Mr. Cousins: I am following the hon. Gentleman's argument closely. I am sure that it has occurred to him that he is calling for harmonisation of tax rates.
      Mr. Radice: EU harmonisation—oh dear!
      Mr. Letwin: I am calling for action by a sovereign country to deal with difficulties that its citizens face. That is different from the proposition that the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) may support, and that the right hon. Member for North Durham (Mr. Radice) certainly supports: that a foreign power in Brussels should tell us how to do it. The difference is signal.
      Mr. St. Aubyn: Is there not all the difference between tax harmonisation imposed by Brussels and tax competition, which is a global phenomenon that no Government can afford to ignore?
      Mr. Letwin: My hon. Friend is absolutely right. When we consider the Finance Bill in due course, we shall again debate double tax relief, which shows the extent of the Government's departure from tax competition. However, I shall leave that point aside.
      I want to consider a vital point that has emerged not from the debate but from the report: the role of Customs and Excise, not as a policeman, but as a tax gatherer. The Treasury Sub-Committee, piously but rightly, states that we need to move to a simpler system with which it is easier to comply. I use the word "piously" because neither the Sub-Committee nor the Government have devised good measures for putting that into practice. However, the aim is noble.
      It is one of Britain's better known secrets that the Conservative party has devised a set of plans for a simpler system. Now that people are again interested in the Opposition because the Government are crumbling around us, it is possible—I put it no more strongly than that—that the Government may pay attention to the admirable plan that we presented some time ago. It has 10 points, because that is how such plans are devised—I pay no attention to that. They are not the only 10 points that are worth considering; perhaps they are not even the 10 most important points, but we should take concrete action. I shall therefore outline 10 easy measures.
      First, there should be six weeks at the end of a VAT quarter for every business to complete its VAT returns. I have spoken to dozens of firms and representatives who have made it clear that that is vital. They do not have enough time to complete their forms.
      Secondly, we need a new, independent business protection unit so that firms that are about to go under have a sympathetic ear, and can prove to that unit that
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      they will surmount the difficulties and not fail. That is preferable to Customs and Excise acting as the creditor of first resort and the party that pulls the business under when it gets into difficulties. Customs and Excise, after contact with the special unit, should be willing to wait for its money.
      Thirdly, there should be a presumption that VAT officers will give binding advice within a specified period and in advance of a contemplated action. People can thus know whether their proposals are legal.
      Fourthly, there should be symmetry in payments. I am sure that, like me, hon. Members of all parties frequently receive complaints about that matter. Why does not Customs and Excise pay the same interest rate when it is late with its payments or repayments as taxpayers who pay Customs and Excise late?
      Fifthly, the detail in VAT returns needs urgent review. Those returns are unnecessarily onerous.
      Sixthly, the disclosure limit for errors is old fashioned. The Government pride themselves on modernising; I do not like that idea, but the Government believe in it. A figure of £2,000, which was set many years ago, is clearly ludicrous and should be increased.
      Seventhly, we need a review of, or consultation exercise about, the future of the capital goods scheme. It used to work, but we now live in a world of computers, and the limits do not reflect the cost of computing.
      Eighthly, something should be done about the payments-on-account scheme. The option of 12 monthly direct debit payments is available from any utility and most other people with whom one deals, but not Customs and Excise. Why not?
      Ninthly, the deregistration threshold should parallel the registration threshold in some way.
      Tenthly, and most importantly, there should be no question, except in the most extreme circumstances, of retrospective legislation to alter the ground rules to avoid avoidance schemes. I say that especially in the hearing of the Paymaster General because, of all the holders of her post in British history, she takes the palm as the most assiduous pursuer of avoidance schemes. Let us promise that we will not go backwards and penalise people for past activities that were legitimate when they undertook them. That applies to Customs and Excise legislation as much as to the Inland Revenue legislation that we shall debate when we consider the Finance Bill.
      I have reached the end of my remarks and the allotted time. I hope that when the Treasury Sub-Committee considers Customs and Excise again, it will emphasise the critical importance of openness and use every power at its disposal to get the Taylor report published. That report has been mentioned often; it is a mythical item and we do not know its contents any more than we know those of the study on merger. It is a shame and a disgrace that the House has not seen it.
      3.56 pm
      The Paymaster General (Dawn Primarolo): We have had a long and detailed debate, using the hook of the vote on Customs and Excise. Many detailed points have been made. In the short time available, I shall not be able to refer to them all. I shall consider the 10 points that the hon. Member for West Dorset (Mr. Letwin) outlined. However, my remarks will concentrate on the main subjects that have been raised.

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      My right hon. Friend the Member for North Durham (Mr. Radice) briefly set out three broad basic topics, which other hon. Members developed. They were the merger, smuggling and compliance. Compliance broke down into two subjects: the cost of compliance for business and its cost to the Department. Many hon. Members concentrated on the internal systems of Customs and Excise and its ability to respond.
      I was grateful to the right hon. Member for Cities of London and Westminster (Mr. Brooke) who, with others, referred to the tens of thousands of people who work in the Department. As the hon. Member for West Dorset pointed out, they collect more than £100 billion—40 per cent. of all tax collected for the Government. They do that very efficiently, at a cost of around 1 per cent. As the hon. Member for West Dorset also said, we concentrated today on what was not collected, but when we consider the record as a whole, it is very good.
      The Treasury Sub-Committee is ably led and chaired by the hon. Member for West Worcestershire (Sir M. Spicer). I take its report seriously. I cannot say that I enjoyed reading it, or that I felt entirely relaxed as today's debate unfolded. However, I want to try to give a positive response. I think that we owe that to those who are employed by us, and who discharge certain duties. Moreover, serious issues need to be addressed.
      I smiled when the right hon. Member for Cities of London and Westminster gave a rather odd example of the rules some years ago. Until recently, a rule stated that French dogs used for tobacco detection purposes were not allowed on our ferries because of our quarantine arrangements. Fortunately, the matter now seems to have been resolved.
      As my hon. Friend the Member for Erewash (Liz Blackman) said, Opposition Members should be extremely careful before criticising the current Government. It was their Government who reduced Customs and Excise staff by at least 3,000. I have been the Minister responsible since the election of 1997. As my hon. Friend the Member for Erewash pointed out, 300 officers dealing with the smuggling of drugs were about to lose their jobs as a result of plans that we inherited from the last Government. We did not proceed with those proposals, let alone the large numbers involved.
      Mrs. Ann Winterton: Will the Minister give way?
      Dawn Primarolo: Yes, but let me say first that I wish only to put the record straight. I do not want to pick an argument with the hon. Lady or her hon. Friends. I think that everyone who has spoken is concerned about smuggling, whether it involves drugs, tobacco or anything else.
      I will give way to the hon. Lady, because I referred to what she said.
      Mrs. Ann Winterton: The Minister is very gracious.
      I take the Minister's point, but the figures to which she refers were estimates for the period after the general election. When her Government ensured that those 300 officers would remain, what they did not do was increase resources. Savings had to be made elsewhere in the service.
      Dawn Primarolo: The hon. Lady is not quite right. We had to save some of the money, because the Department
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      was within its budget, but movements occurred rapidly in the Treasury to deal with the pressure points, according to where we thought they were.
      Many hon. Members referred to the Financial Times report that asked whether £1 billion, £2 billion or some other sum was missing, or unaccounted for, in the context of excise control regimes. They also referred to the announcement that I made on Friday. The figure given in the Financial Times is incorrect. Let me tell the House, as clearly as I can, how this happened, how it came to my notice, and how I intend to proceed.
      An interim report—an internal report by Customs and Excise—was ordered by the new chairman of Customs and Excise, and was received by me last Friday. It identified serious weaknesses in the Department's control of excise duty collections. The right hon. Member for Cities of London and Westminster repeated today the fears that he expressed when the rules were introduced, on the commencement of the single market. A particular problem relates to the mechanism for releasing spirits and wine that are subject to duty from bonded warehouses.
      There have been numerous prosecutions, resulting in about 100 convictions in connection with one major group. Nevertheless, the report concluded that there had been significant revenue losses, which were deemed principally to have happened in the three years following 1995.
      In 1998, changes were made to the regime, but it is not clear whether the arrangements are tight enough. I believe that hundreds of millions could potentially be lost. However, having been faced with something so serious, I believed—and I was supported by the chairman of Customs and Excise—that we should act immediately on receipt of the results of the internal inquiry. I decided that we should conduct an external investigation as quickly as possible.
      The National Audit Office had been informed, and was already working with Customs and Excise in an attempt to quantify the losses and identify the weaknesses in the control system. I have given an indication—and I have notified Her Majesty's Opposition—of what I would expect the inquiry to cover. I would expect it to cover the policy, legislation, systems and resources within Customs and Excise relating to excise holding and movements, and to determine weaknesses and gaps, including those relating to the efficiency of the system of bonds and guarantees. I would also expect it to discuss how best to establish clear internal accountability for the securing and protecting of departmental revenues. In particular, I would expect it to ask whether there should be a single point of accountability in Customs and Excise for cash revenue management. Finally, I would expect the inquiry to consider how best to ensure that sufficient weight is given to protection of revenues as a key criterion in Customs and Excise handling of fraud investigations.
      Any shortcomings in the system, and any information relating to resources—prosecutions are still taking place, as are Customs and Excise responses—will be referred to the investigation at the conclusion of the cases involved. I will ask the leader of the inquiry to keep me informed, and to tell me whether immediate steps are planned. I support the appointment of someone who will be able to deal with the systemic problems that may arise, take a commercial approach, and deal with the issues directly. I will, of course, keep members of the Select Committee informed.

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      Before turning to the issues of smuggling, merger and compliance, let me make a few general remarks about Customs and Excise. Although we all understand that the focus of today's debate is on particular areas of Customs and Excise, it is important—for the benefit of those who follow our proceedings, especially those working for the department concerned—to acknowledge what the department has done well. As I have said, it has collected more than 40 per cent. of central Government revenue, at a cost of about 1 per cent. Key agencies are reducing the bulk supply of drugs to the United Kingdom market, and tackling the major trafficking problems.
      The Department is a major element in the Government's anti-drugs strategy. Its intelligence-led deployment of officers in the United Kingdom and abroad prevented some £1.24 billion worth of drugs from reaching the UK last year. It has also dismantled and disrupted trafficking organisations.
      I do not want to undermine the credibility of the hon. Member for West Dorset among his hon. Friends, but, as he said, we are talking about a Department that deals with the protection of society—in the context of drugs and smuggling—with the collection of VAT, and with the whole excise duty regime.
      As a Minister, I consider that what is crucial is that I understand what the Department does best, what it should do, what it may be doing that it should not do—what is inappropriately located there—and to build on that understanding. It is the policy objectives that I should pursue. I said to the Committee on the question of merger that I believed, as the Minister responsible, that the vast resources and time used to put Departments together was a diversion—if Members will excuse the pun—from the true objectives, which must be to ensure that the Department reaches its objectives.
      I am not saying for a minute—no one could, at the end of the debate—that no things need correcting in the Department. We need to look seriously at that. The new chairman of Customs and Excise has come from the private sector. A third of those on the new board are new members. A third come from the private sector. The remaining third have experience in the Department. It must drive change forward.
      I welcome the comments by members of the Select Committee on the Treasury that they intend to return to the issue and to look again at Customs. The exercise that they have conducted already has been extremely useful, even though I did not entirely agree with some of their conclusions. Nothing is ever closed. The constant striving to ensure that the Department does its work properly is crucial.
      The Department faces huge challenges, particularly in relation to smuggling. Comments were made about the scanners, the increased resources and how we are tackling the problem. It is important to say that the pressures on the Department, and what it faces, are never more starkly seen than in Dover. There were 1.7 million freight movements through the port last year and that is increasing. It is a truly herculean task for Customs and Excise staff to keep a
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      balance between trade flowing swiftly through the port and countering smuggling. Organised criminal gangs now dominate the smuggling of drugs, spirits, cigarettes and, most tragically, as we are seeing, people.
      The 54 people from southern China who died in a container that was searched at Dover earlier this month were discovered by Customs officers. Hon. Members will perhaps be able to imagine the distress of those officers on discovering such a sad and tragic cargo. I have nothing but admiration for their professionalism in that front-line work, but the challenge to us with regard to smuggling is this. Hon. Members have sought to characterise it as a duty problem. As my hon. Friend the Member for Erewash and many others have pointed out, even without any duty at all, that activity would continue. If we dealt with duty, that would continue. We must deal with the criminals and what their activity does to our communities and to legitimate businesses. The job will continue to be more difficult.
      Obviously, there is always confusion between what is called the white van trade—those who go opportunistically—and other smuggling. The first review that the Government undertook—the alcohol and tobacco fraud inquiry—gave more resources, provided more Customs officers and targeted specifically the white van trade, compared with the systematic and criminal importation of vast amounts of tobacco. That requires a different response. The £209 million will provide that.
      The scanners are there. Some of them will be mobile, some will be static. We had to go through a process of ensuring that we handled the tenders correctly. We have to publish details of who contracts for them. That equipment is there primarily to find smuggled goods. The immigration service believes that there are more efficient ways of detecting the smuggling of people. None the less, there will need to be agreement because undoubtedly, at times, people will still be found. That is a subject for discussion between the Home Office and the Department.
      On the wider questions of VAT compliance and what needs to be done, I take on board everything that the Committee has said. We are rooting out inefficiency, making the system efficient, minimising burdens on business and streamlining as much as possible how we operate as a Department to deliver the resources. All of that is under way. There are many examples—which I cannot now give, but I have a feeling that I will be in front of the Select Committee again on the subject anyway—of closer working and how it is developing and blossoming. It shows how we can bring the Departments together culturally and how we can ensure that we drive that forward.
      I apologise that there are still questions of—
      It being three hours after the commencement of proceedings on the motion, the debate was concluded, pursuant to Resolution [27 June]
      Question deferred, pursuant to paragraphs (4) and (5) of Standing Order No. 54 (Consideration of estimates &c.).

  ESTIMATES DAY
    Class XII, Vote 3

      Social Security
      [Relevant documents: Third Report of the Social Security Committee, Session 1999–2000, on Medical Services, HC183, and the Government's response thereto, Cm 4780; and the Social Security Departmental Report: The Government's Expenditure Plans 2000–2001 to 2001–2002, Cm 4614.]
      Motion made, and Question proposed,
      That a further, revised sum, not exceeding £1,110,424,000 be granted to Her Majesty out of the Consolidated Fund to complete or defray the charges which will come in course of payment during the year ending on 31st March 2001 for expenditure by the Department of Social Security on administration, for agency payments, expenditure incurred as part of the Welfare to Work initiative, expenditure on behalf of the Department of Health, and for certain other services including grants to local authorities and voluntary organisations and other organisations—[Mr. Belts.]
      4.16 pm
      Mr. Archy Kirkwood: It is a pleasure and privilege to open this short debate under the estimates on the important subject of the provision of medical services to the Benefits Agency. I have felt for some time that Parliament does not take enough time to revisit some earlier policy decisions taken in primary legislation. If that is true of primary legislation, it is certainly true of secondary legislation and the administrative systems within the departmental structures of Government. We need to look at the way in which primary and secondary policy is implemented on the ground through the administrative procedures.
      It is an appropriate subject for debate under the estimates because, as the House will know, each year, some £25,000 million is devoted to providing for those who have a disability or long-term sickness. That is a large part of the Department of Social Security budget. In 1998, a contract was entered into with Sema, a private sector company, to provide medical advice for decision makers within the Benefits Agency. The contract totals some £305 million. It is for five years, with a possible extension of two. Therefore, the subject raised on the estimates day is an appropriate one.
      My colleagues on the Select Committee on Social Security are grateful to our colleagues on the Liaison Committee for allowing us to allocate time for that subject. It is raised on the basis of the Social Security Committee's third report of the current Session, which was published recently. It was occasioned by the concern that came through clearly to my colleagues on the Select Committee—from a variety of different sources, it must be said.
      In October and November, the Under-Secretary of State for Social Security, the hon. Member for City of York (Mr. Bayley), bravely made himself available for two evening sittings and had an uncomfortable time from a lot of Members, who were visibly distressed by and angry about the treatment that some of their constituents were getting, so we had that evidence available to us. Other evidence came to the Committee through our contacts with pressure groups and disability groups—the National
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      Association of Citizens Advice Bureaux and the like—which registered real areas of discontent about the way in which medical services work was being done. The casework from colleagues, taken together, led us to conclude that we should look at the provision of medical services.
      We were able to take what we believed was a relatively short time for what we believed would be a relatively quick report. After placing the usual advertisement soliciting evidence from interested parties, we soon realised that the report could not be a cursory one. We received a staggering volume of evidence, which was staggering also in the extent and depth of the difficulties that it revealed. There was very clearly great disquiet in all parts of the medical services and Benefits Agency service delivery systems. Therefore, in November 1999, the Committee agreed to produce a report, which has now been published.
      The Government have published a response to our report. I acknowledge that the Under-Secretary has a very good track record on the subject—for which he is responsible. Although it may embarrass him to know this, when the Committee went to various parts of the territory to discuss the subject, people spoke highly of him. It was recognised that, before he became a Minister, on his own initiative, he worked with the National Association of Citizens Advice Bureaux in York on this very subject. We are lucky that we have such a Minister. The trouble is that Ministers who are good and expert on subjects often move on. We shall have to work on the worst case assumption that he will soon be a Cabinet Minister and that we will be dealing with someone else.
      The general tone of the Government's response to our report is positive. I detect the Minister's fingerprints on some of that response, which is welcome. I shall deal with the Government's response in a bit more detail in a moment.
      It is fair to say that the system was never perfect. There was much disquiet also about the old system—the Benefits Agency medical services system—which was operated in-house and entailed medical evidence being given by officers employed by the Department of Social Security. It is also fair to say that we are bound to have some difficulties and complaints with any system purporting to undertake 1 million medical examinations annually. It would be foolish to have any other expectation of such a system.
      In fairness, it is also true to say that the contract has been running for a relatively short time. It was an ambitious contract, and one could argue that it has not really bedded down yet. Additionally, as some applicants for disability benefits who are rejected—because they do not meet the eligibility criteria established by the House—are disappointed, an element of disappointment and anxiety is built into the process. We have to take that into account, and to be careful in reaching judgments and comparing the system with the previous one.
      In paragraph 100 of their response, the Government quite candidly admit that the benefits that they had hoped to achieve from contractorisation have not been realised. I am sure that the Minister would say that it is too soon to judge that and that the contract has another three years—with an additional two years, if necessary—to run. However, at least the Government have made that admission.

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      Nevertheless, I think that the House is right to consider carefully how the decision was taken to privatise the medical services decision-making process. In retrospect, I think that the Government were wrong to take the decision so quickly. The Minister will know that, a few short months after the new Labour Government took office, some additional requirements were added to the brief. Admittedly, that happened after the previous Government had examined the issue for some time and had well developed plans.
      I really wonder, however, whether a root and branch review was conducted of the proposals before the decision was taken, particularly in relation to advice from pressure groups and those who were going to be part and parcel of the system's daily work. Although all the contracts looked fine, the lawyers had crawled over them and the work was done professionally, with the benefit of hindsight, I do not think that anyone who had ever advised someone applying for disability living allowance or incapacity benefit ever got anywhere near that process.
      If I had been a Minister, I think that I would have delayed contractorisation until I was absolutely sure of the quality of the service being delivered. I do not think that such an assessment was ever made, and we are paying a price because of that omission. The contractorisation timetable was doubtful, and contractorisation was implemented too quickly.
      Additionally, there was inadequate benchmarking. I should be glad to have information on any comparators from Northern Ireland, which has a different way of dealing with the process. As Sema was given all three areas—the north, the south-east and the south-west—all in one go, the competition element could not be tested. There was, therefore, no way of benchmarking performance by sharing out the contract geographically.
      An issue running as a thread through the report—the British Medical Association raised it originally, but others also did so in their own ways—is that the contract process, including its details and funding, was too lean and that it may not have provided sufficient resources to do the job properly. Undoubtedly, the day will dawn when the National Audit Office has time to examine the issue. However, if we are going to increase contractorisation and use that contract as a model, I really should like a Government body or departmental expert to examine the process and to determine whether lessons can be learned about how the decision was taken and how the process was implemented.
      I say quite candidly to the Minister—I was nice to him earlier, but there is always a "but" when one is nice to Ministers—that, although I am prepared to wait for the contract to expire, in my considered view, if the level of service to claimants does not improve, Ministers must prepare for the possibility that the contract will be awarded elsewhere. I do not say that lightly, but I think that it is true. The view that the House takes today will be important in that decision.
      This debate gives hon. Members the opportunity to give their own constituents a voice. I could use the next three hours of the debate reading out, without repetition, complaints that we have received. Some of the complaints are difficult to comprehend, because of the daftness and natural injustice that seems to have been visited on some claimants. Of course, we have heard only one side of the
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      story. We were dealing with anonymous complaints, which we encouraged, and were therefore never able to hear a balanced view.
      In their response, the Government have taken a bit of a potshot at the Committee for accepting anonymous evidence. Hand on heart, I say that only a fraction of the evidence that we took was anonymous. However, if Ministers really do not understand that people in this country and in this day and age are frightened to put their names to their complaints, they do not understand the extent of the problem. I therefore make no apology for taking evidence that was lodged anonymously.
      Additionally, Select Committees are not equipped with the depth and range of services that we need really to examine this type of problem. Only Departments have the resources necessary to conduct such an inquiry. Therefore, I do not think that, in the production of our brief report, there was any other way of getting the flavour of the boiling anger and frustration felt by those who have had bad service.
      I confess that I told my Committee members that I did not think it would be possible to get evidence from everyone. It is asking a lot to ask people who have suffered at the hands of the system to come and tell us their story. However, we went to Bristol for one evidence session, and the opportunity to speak to people directly was an absolute eye-opener.
      One thing just did not compute. We spent the morning at one of the medical centres provided by the Sema group and by medical services. We spoke to people whom I considered to be dedicated professionals. They were impressive, caring people who thought that they were providing a service that was up to scratch. I thought that there must have been some mistake, as the written evidence did not relate to what we were being told by the medical professionals. However, we spent the afternoon session down the hill in Bristol, where it was a completely different story.
      There is a disjunction between what the civil service and the medical professionals were arguing and what we were told that afternoon by people who had had terrible experiences involving life events that they will never forget. The question is to what extent the really difficult cases are typical. I have no way of knowing that, but the volume of the evidence suggests that there is a problem which needs to be addressed urgently. People out there are crying out for help and they need a response. This afternoon's debate provides an opportunity for that. I hope that right hon. and hon. Members will take the opportunity to give the House a flavour of some of the cases that they have struggled to ameliorate and deal with, so that we can decide where to go from here.
      I am not looking for scapegoats, victims, resignations or any damn thing. However, we all have an interest in moving on and trying to improve the service. The Government's response to the Select Committee report gives me confidence that, with good will, we can do that.
      The Select Committee report can be considered under four categories. The first is the recommendations that are designed to improve the medical quality of the examining medical practitioners' reports. There was a great deal of concern about that. Secondly, I shall briefly look at the recommendations that are designed to improve the service to claimants generally, and with particular reference to

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      claimants from ethnic minority groups, female claimants and claimants with mental health problems, whose cases were particularly poignant and difficult to deal with.
      The third category comprises recommendations that are designed to remove the perverse financial incentive, of which the Government are aware, involving the relative financial gain of considering cases by desktop scrutiny rather than by medical examination. There is a potential incentive for the contractor to make more money by carrying out fewer examinations. Incidentally, that might result in benefits being made available to people who did not really deserve them. The fourth and final category comprises the recommendations that are designed to improve the terms of employment of the examining medical practitioners, and their pay and training, which caused some concern.
      On the first category—the medical quality of reports—the Government's response at paragraph 7 is welcome. It is to set targets for a reduction in the proportion of "C grade"—or unacceptable—reports and for increased compliance with scrutiny guidelines for incapacity benefit cases. I hope that that course of action will be prosecuted with energy and vigour.
      The Government state at paragraph 15 of their response:
      More rigorous recruitment criteria…have been introduced which should set a minimum level of medical experience for the doctors who are employed.
      I shall return to that in a moment as the British Medical Association has faxed me a response that causes me some concern.
      At paragraph 20, the Government's response states that revised guidance has been issued to examining medical practitioners. I am particularly pleased that a medical skills database has been introduced. We should take advantage of the fact that companies such as Sema have expertise in these matters. If we can have available quality audits of doctors' work, details of their training and any remedial work that they may have undertaken, that must be valuable in terms of getting people trained and enabling the contractor to assess medical practitioners' success rates.
      I welcome the targets and the medical skills database and, in particular, the fact that in looking at the medical quality of reports, the Government recognise that their objectives have not yet been met and that work needs to be done.
      Rev. Martin Smyth: The hon. Gentleman referred to a comparison being made with Northern Ireland. Was he referring to the situation generally, or specifically to the medical examiners? Quite frankly, there is great concern about that. In a number of cases, the standard of examination was deplorable and it was despicable that people who were genuinely in need were put under such pressure. I wondered whether the hon. Gentleman was referring to that, or to another area where he thought that things were better in Northern Ireland.
      Mr. Kirkwood: Had I realised that the hon. Gentleman, who has expertise in this area, would raise the matter, perhaps I would not have strayed into an area that I do not know very much about. My point was that if
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      Sema are providing medical services in the northern area, the south-east and the south-west of Britain, the only opportunity for finding another system to act as a benchmark would be to look at the provision in Northern Ireland, but the hon. Gentleman may have taken away any hope of succour from that direction. If the situation is just as bad in Northern Ireland, it may not help us. However, I welcome his expertise and acknowledge his interest in the subject, and I hope that he manages to catch your eye, Mr. Deputy Speaker.
      I now turn to the Government's response in respect of service to claimants. At paragraph 25 they state that training is being offered to examining medical practitioners in customer care, but accept that revised guidance, which provides more information, is welcome. They state at paragraph 27 that the Department is working with medical services to review all aspects of the treatment of claimants and that a taskforce has been set up to review all communications to claimants.
      Less welcome, however, is the fact that at paragraph 36, the Government appear to reject the need for a review of the system's treatment of mental health problems. At paragraph 39, in respect of communications with patients from ethnic minority groups, they state that multilingual notices
      would not be consistent with current practice in other parts of the Benefits Agency.
      If that is a defence, I do not think much of it. Some members of the Select Committee who specialise in these matters helped us enormously by bringing to the fore some of the problems experienced in certain communities, so I hope that that is not the Government's last word on the issue.
      At paragraph 40, the Government appear to complain that our comments were based on anonymous examples. I tried to deal with that point earlier. At paragraph 42, they state that new training will be provided in multicultural awareness.
      Less welcome is the fact that at paragraph 45, the Government's response totally fails to address the difficulties of female claimants. They state that if a claimant requests a female doctor, attempts will be made to meet that request. That is not a sufficiently robust response.
      Although the Government say that they understand the Select Committee's concerns about the complaints procedure, once again, they accuse us of using anonymous evidence to support our view that the complaints procedure is totally inadequate. Indeed, early in the inquiry, we were told that a customer satisfaction survey produced a satisfaction rating of 88 per cent. As I said earlier, there is clearly a disjunction with some of the evidence on the subject and that is deeply worrying.
      On the question of service to customers, the Government are in danger of being complacent and defensive. I notice with interest that some 46 hon. Members signed early-day motion 826—which was unsponsored, honestly—congratulating the Committee on its report. Against that continuing level of concern, the Government's response leaves something to be desired.
      I am content that the Government seem to have got the message about removing the financial incentive to deal with claimants by scrutiny rather than examination. The report says that the Government would view "with

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      unmitigated disapproval" any evidence that the fall in the number of examinations was driven by commercial gain. I am content with that response. It is a difficult issue and there may be good reasons for some of the trends in the figures. I hope that the Government continue to share the Committee's concern that that potential threat exists and I urge them to keep the matter robustly under review.
      The Government state that within one year, all doctors will be trained in the assessment of people with mental health problems, the treatment of people with disabilities and the avoidance of distress for people with musculoskeletal conditions. That is welcome. The Government are also concerned about the failure of medical services to meet their contractual obligation in regard to training.
      Mr. Desmond Swayne: Since the publication of the report, I have received representations from sessional doctors in my constituency who are being encouraged by Sema to take additional training, but are being required to do so without pay. When the training was provided by the Benefits Agency, the doctors were paid for doing it. The Government have said that they are renegotiating the terms, but what prospect is there of them bringing pressure to bear on Sema in that respect?
      Mr. Kirkwood: As I would expect, knowing the hon. Gentleman as I do, that is a perceptive point and he anticipates my next comments. The Government sidestepped the issue of pay for training days by stating that it was a matter for medical services to address. Frankly, that will not do. I welcome the initiatives on training, but I remain concerned that by failing to specify the number of days of training to be delivered by medical services, the Government may allow the contractor to opt out entirely. I hope that that will not happen.
      The BMA has raised several issues connected with the report. The parliamentary response arrived on my desk this morning, and the tone of it concerns me. The BMA is an interested party and tries to improve the pay and conditions of its members, just like any other trade association or professional body. However, it points out several issues that suggest to me that the relationships in the set-up are not yet right. For example, it points out that people who work as sessional doctors for Sema and medical services have received no pay increase for some eight years. During our inquiry earlier in the year, it was suggested that that situation was being addressed and would be fixed. I do not know the current situation and it would be helpful if the Minister could give details. I know that he will say that it is technically nothing to do with him under the contract, but Nestor Disability Analysts says the same, and medical services also seemed to say the same at one point. Everybody was passing the buck and that may be why no pay increase has been given in eight years. If that is true, it is unacceptable and will not assist in attracting the quality of medical practitioners required to perform that sensitive and skilled work.
      I am also worried about the spirit of non-co-operation that appears to exist between the BMA and medical services. The BMA says that it last met medical services in September 1999. The proposed meeting in December was cancelled by medical services and a letter sent by the BMA to medical services on 25 November 1999 has not yet received a reply. I do not know any more and I do not
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      wish to enter into any dispute between the two bodies, but that does not suggest the spirit of co-operation necessary to achieve improvement.
      The BMA also raised the issue of time for interviews. It says that medical services have informed doctors, in a letter sent on 22 September 1999, that they will have to report all instances in which fewer than five clients are seen per session. A session lasts three and a half hours. The BMA also alludes to the issues surrounding non-payment for training, mentioned by the hon. Member for New Forest, West (Mr. Swayne).
      Mr. Gordon Marsden: On the point about the BMA's concerns about the time spent on individual cases, I noted the Committee's comments in the report. I offer the hon. Gentleman an example from medical services. I wrote to the Preston office with concerns about a particular doctor and the amount of time that he spent on his investigations. The reply from a Miss Unwin, the client team co-ordinator, stated straightforwardly:
      From the perspective of Medical Services, a total of 45 minutes or so in a house would be regarded as sufficient in most cases. The majority of clinical examinations can be concluded in 10 minutes.
      Does not that underline some of the BMA's concerns?
      Mr. Kirkwood: It does, and the hon. Gentleman makes his point eloquently. I hope that the Minister has taken due notice.
      The BMA says that it is concerned that it does not know how many sessional doctors are employed by Nestor Disability Analysts. Although the Department was told that 2,482 doctors had agreed to the contract, with a further 659 continuing to provide a service but without signing a contract, information obtained by BMA members indicates that a significant proportion of the 3,000 or so doctors approved to work for medical services have stopped offering their services. The BMA also believes that even under the new, rigorous recruitment criteria, which are mentioned in the Government's response, ordinary general practitioners can start to work for Sema and medical services as soon as they qualify. That was not my understanding during our work on the report, but I may be wrong. The BMA also believes that the pay issue must be addressed.
      The BMA drew my attention to some fresh concerns that are pertinent to the debate. The association is a not inconsiderable pressure group and its views should be taken into account. I hope that the Minister will be able to answer some of its questions.
      I shall conclude by saying that, although saving 14 per cent. of a contract worth £305 million over five years will realise £62 million, I wonder whether that is not taking too much out of the system. Removing that money will put pressure on the most disadvantaged people—the claimants.
      My anxiety about that is genuine. Today's debate should question whether the resources in the system are sufficient to achieve the standards that we all want. Speaking for myself, I think that the jury is out on medical services. The debate will allow hon. Members to speak for their constituents, but I believe that the Social Security Committee is likely to decide that, one way or another, it will in future monitor very carefully the progress of these matters, to which it reserves the right to return.

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      The Committee is also likely to take up the option of compiling a report at the end of the contract period. It is possible that that report will make a recommendation as to whether the Government are safe to continue with the present arrangements.
      I hope that the debate will be informative, and that the Minister will be able to reassure the House. I hope too that hon. Members will feel that the Select Committee report has been of some assistance in securing better provision for our constituents.
      4.50 pm
      Mr. Gareth Thomas: I am grateful to my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood), who is Chairman of the Select Committee on Social Security, of which I am a member. He provided a comprehensive analysis of the inquiry conducted by the Committee.
      An inquiry and report such as the one that we are debating today offers an admirable example of the good work that Select Committees can do. If the report serves to concentrate the Government's mind on the need to maintain a good quality service in this crucial area, it will have been justified.
      I am heartened by the Government's generally positive response to the report. It is worth mentioning, as the Government are at some pains to do in the introduction to their response, that the history of medical services needs to be placed in context. There is reason to doubt the effectiveness of the present contractorised system—I am sure that some of the defects that came to light are only too familiar to hon. Members—but the fact remains that the old system was very far from perfect.
      Delays were part of the culture of the old system, and there was a total lack of co-ordination in terms of standards and training. Contractorisation at least gives the Government some significant degree of leverage over how quality should be monitored and the system improved.
      As my hon. Friend the Member for Roxburgh and Berwickshire said, the people seeking benefits under the system—which costs £25 billion a year—are the most vulnerable in our society. It is crucial to ensure that examinations for eligibility are conducted by doctors in a professional and fair manner, and claimants must believe that they are being dealt with fairly. I am sorry to say that it became apparent from our inquiry that in many instances that was not the case.
      I acknowledge that an enormous bureaucracy is involved, given that a million medical examinations are held every year in relation to medical benefits. No system can be perfect, but there is certainly a need for improvement. I agree with what has been said already: if medical services do not improve significantly over the next year or so, there should be scope to reconsider the contract and take robust action—including the draconian step of withdrawing the contract from Sema.
      Many hon. Members will want to inform the House about their experiences in this matter, so I shall confine my remarks to a few about some of the issues highlighted in the report. First, I want to deal fairly and squarely with the perception of fairness.
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      The perception exists that doctors do not spend enough time with claimants, that they examine them too quickly and do not do justice to their complaints. I agree with the Government's response that time spent with a claimant is not necessarily commensurate with quality. However, I am sure that the Minister agrees that it is essential for examining medical practitioners to devote sufficient time to listening carefully to claimants. Some claimants no doubt have difficulty in explaining themselves, but they must be left with the overall impression that they have been dealt with fairly.
      I am dismayed that the Government are somewhat critical of the Committee's approach to what the Government describe as anonymous reports of instances of dissatisfaction. I echo the remarks of the hon. Member for Roxburgh and Berwickshire: it is unrealistic to expect vulnerable people, who may be afraid of the consequences of complaining too strongly, to be very forthcoming in giving their identities.
      Mr. Gordon Marsden: Does my hon. Friend accept the close correlation between the cursory way in which some claimants are dealt with by examining medical practitioners and their subsequent reluctance to make a formal, or an identifiable, complaint? In my constituency, I have had several complaints against a particular EMP for giving a physical examination that lasted for only two to four minutes. When I pressed one or two of the claimants subsequently at advice surgeries—
      Mr. Deputy Speaker (Mr. Michael J. Martin): Order. I really must stop the hon. Gentleman. This is an intervention.
      Mr. Thomas: My hon. Friend makes a valuable point. A few doctors keep cropping up, time and again. They are very powerful, or are seen to be powerful, which might account for the reluctance to complain. The complaints system is not particularly user-friendly. The rate of successful appeals has traditionally been very high, although I accept that that is not necessarily a reflection of poor medical evidence. However, the point is well made.
      The Parliamentary Under-Secretary of State for Social Security (Mr. Hugh Bayley): The pattern has been that about 4,000 people a year make a formal complaint. There has been a lot of debate about whether that is a reflection of the true number of people who are dissatisfied, or a small part of the true number. However, I caution my hon. Friend against creating the myth that something happens to people who complain. Has he any evidence of somebody being victimised as a result of using the complaints procedure? If so, the Committee should bring it forward; it has not done so to date.
      Mr. Thomas: I do not have such evidence. I raise the issue—I do not want to dwell too long on it—simply to rebut the Government's suggestion that, because we could not provide a list of identities of individual complainers, that had somehow undermined our evidence.
      It is imperative to have a programme of recruitment that ensures that doctors who really want to do this job, and have some pride in their work, are recruited. There is an urgent need to look at their remuneration. I, too, am concerned that there has been no increase in the salary of

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      EMPs for some time. Unfortunately, that suggests that this is a Cinderella service, with all the implications that that has for quality.
      A more rigorous system of auditing performance is required. I am very pleased that the Government intend to take action to remove doctors who consistently under-perform. I am sure that that was always so, but it is nice to hear it. It will be welcome if medical services' efforts are redoubled.
      Training in customer care is essential, as is dealing with poor performance. The Committee criticised the manner in which EMPs deal with claimants with mental health problems or from ethnic minority groups, and strong conclusions were reached on some doctors' cultural insensitivity. I am pleased that the Government accept that that matter must be rigorously addressed.
      Two points should be made on appeals. First, a feedback procedure is necessary. When a pattern emerges of successful appeals involving a particular doctor, there should be some follow-through. Alarm bells should ring so that someone conducts inquiries and asks what is going wrong. It seemed to the Committee that that does not happen, and I should be grateful if the Minister would clarify the Government's approach.
      Secondly, as a lawyer experienced in personal injury cases, I know that, in addition to the medical report for the case, one of the most valuable pieces of evidence for a court determining liability and quantum is a person's entire medical history—general practitioners' notes, hospital records and so on. If one is successfully to assess someone's eligibility for benefits, that is essential. I did not know until I heard it in Committee that there appears to be no systematic approach to ensuring that additional medical evidence is obtained. The procedure requires tightening.
      I share concerns about financial pressures in the system, which give rise to suspicion that there is a disincentive to carrying out full examinations. There is evidence that the scrutiny procedure—examining the papers, not the patient—is increasing. The Government are concerned about that, and the figures are particularly worrying.
      I emphasise the need for adequate training of doctors. The status of doctors who specialise in this area should also be enhanced. There is a strong case for encouraging doctors to have training, paid for by medical services or the Government, to improve their skills and obtain further qualifications, including a diploma in disability assessment medicine.
      The Committee was right to ask whether the objective of contractorisation had been achieved. If improvements are not seen to be happening fairly quickly, the Government should bite the bullet and re-examine the contract.
      5.5 pm
      Rev. Martin Smyth: I appreciate this opportunity to make a brief contribution to the debate. I join the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) in paying tribute to the Under-Secretary, the hon. Member for York (Mr. Bayley). I worked with him when he was a member of the Select Committee on Health. He is open and helpful on all issues.
      I share the concerns that have been expressed, especially in relation to Northern Ireland. My first concern is that medical examiners should be directed not to look
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      just at the picture presented by the client at the moment of the examination. However, time and again, I discover that that is exactly what they do. They quickly tick the boxes, without listening to the patients who are trying—in sometimes limited vocabulary—to explain their problems.
      I thought we had moved on from the situation that existed 15 years ago when I took up the case of an elderly woman. She was asked whether she could walk unaided and, because of her dignity, she replied that she could and showed the examiner how she did so. Mr. Deputy Speaker, you might know, from your Scottish background, that in our Ulster Scots parlance, we talk about doing the rounds of the kitchen. She moved from the table to the dresser, but held on to the furniture all the time; that was supposed to show that she could walk without help. The medical examiner put on the form that she could walk unaided.
      One of our traditions in this place is that, during Prayers, we turn towards the Bench. Some people say that the tradition arose because it was easier to kneel on the seat. Not long ago, I was involved with the appeal in the case of one my constituents. The medical examiner had put on the form that the person could kneel unaided. Before the tribunal, I asked my constituent where the medical examiner had asked him to kneel. My constituent had been asked to kneel on a chair. I can kneel reasonably well on the floor, but it is far easier to do so on a chair. To pass that person as having mobility because he could kneel on a chair and could do certain things was ludicrous. That quality of examination does down the service.
      One is left with some doubts, because, under the contractual arrangements, the examiners are paid by the hour and by the number of people with whom they deal. Surely, in health and social services, we should be concerned to put the patient first. However, there is some recent evidence that a person in at least one branch of the health profession put his office needs before the care of the patients in his area. That does down the care of people with disabilities. We should be more concerned about them.
      I would have no difficulty in removing from the list those people who find a way around the system—who fill in the forms so as to give the impression that they are in a bad way. On the other hand, the job of the medical examiner should be to discover whether the case is genuine rather than to try to get people off benefit.
      Only this morning, I spoke on the telephone to the constituent of one of my colleagues, whose case reflects some of the concerns felt by patients when they talk to doctors. She has a girl of 10, vaccine-damaged, and a young man, now 17 years of age, also vaccine-damaged. It transpired that even her own GP had not been given the proper notes from the hospital, and that he was unaware of certain treatment that one of those young people had received, but his guidance to her was that she had a case and should pursue it, either against the firm who supplied the vaccine or against him. She replied, "Doctor, I would not want to bring a case against you as my doctor."
      That personal relationship is first and foremost: people trust doctors and are rarely ready to complain about them. I believe that that is one reason why, although the number of successful appeals regarding medical examiners has been growing, some people do not consider that they have a right to appeal, and therefore do not appeal. I believe that the authorities expect people to appeal if they are wrongly turned down, but I am not convinced that they will necessarily do so in many cases.

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      Therefore, we should start by raising the standard of medical examiners. I have not met any. I find it hard to decipher their signatures. They do not turn up to give evidence to support their case when we go to appeal. The matter is left to an adjudicating officer, who must take the decision in the light of the form that the medical officer has returned. That is one reason why I questioned the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) as to what difference he had discovered between Northern Ireland and the rest of the kingdom, but I now know what he intended.
      I believe that perhaps in Northern Ireland we are still suffering, with the rest of the regions of the kingdom, because some medical examiners are not doing their job properly in the interests of the client or patient, but are more concerned to fulfil their contractual arrangements, which may be to get through as many examinations as possible in a given time. That is not a proper examination.
      I sometimes tell folk, "If there is something wrong with you, you had better go to the vet." They ask, "Why do you say that?" I reply, "Well, when you go to the doctor, the first thing that he will say is, 'What's wrong with you?' whereas a vet has to find out for himself what is wrong with an animal." When I tell my medical friends that, they say, "If you go to a vet, the next thing that he will say is, 'Where's the shotgun?'" In a caring society, we cannot spend our time getting rid of people who may be an economic drain, but who have a right to the facilities and support of society.
      5.13 pm
      Mrs. Maria Fyfe: I congratulate the Select Committee on Social Security on the excellent work that it has done. I am especially glad because I believe that it will give heart to a number of my constituents who have begun to wonder whether there is anyone out there listening. I also welcome the Government's positive response.
      However, I am grateful for the opportunity that the debate gives me to draw attention to a few issues. Earlier today, I spent half an hour having the three-yearly check-up that is offered to Members of Parliament, merely as a way of checking on one's general health. I have absolutely nothing wrong with me, yet it took half an hour simply to question me about various aspects that could be wrong with my health. It seems to me that, although it is fine for an examination to be concluded within 10 minutes if it is patently obvious that the person is so severely disabled or ill that there is no point in continuing an examination at length, if someone is likely to be denied either disability living allowance or incapacity benefit, a considerable amount of time should be spent before a person is denied that benefit and a considerable sum of money is taken from them.
      Recently, a father in my constituency came to visit me to talk about two sons, both of whom have the same serious illness. Both applied for disability living allowance, and an odd thing happened: the son whose condition is less severe was awarded the higher component and the son whose case was far more severe was denied it. Mistakes can occur in any organisation that deals with so many cases, but there needs to be a quicker way of putting right an obvious anomaly when evidence is presented by a general practitioner and a hospital doctor.
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      I know that hon. Members can provide umpteen examples from their constituency case loads, but I will not weary the House with many of my own. However, a particularly atrocious example is that of a constituent who was denied incapacity benefit, but who two weeks later was in a hospice for those dying of cancer. That is how bad the errors can be.
      At present in Glasgow, the waiting time for appeals has been reduced to 16 weeks. It had been as long as a year, so I am grateful for the fact that it has been reduced to a more reasonable level. However, people have to make do without their benefit while they wait all those weeks. Perhaps in other parts of the country people have to wait longer, so I suggest to my hon. Friend the Minister that it might be worth while considering the possibility of allowing people's benefit to be restored if they are forced to wait more than a few weeks. I know that the Department intended that people would do without the benefit because their cases would be heard soon. However, if a case is not heard for months, it is unfair to deprive them of their benefit.
      In the report of the Social Security Committee, I found a surprising statistic that I want to place on the record. It says:
      In 1998–99, the Independent Tribunal Service (as it was then) received 324,067 appeals.
      That is a third of a million, and the figure relates only to those who appeal. Many other people should receive the benefits, but they are too sick, too tired or too dispirited to make an appeal. Many of the appeals made were successful. The reports points out that 41 per cent. of incapacity benefit and 49 per cent. of DLA appeals were successful. That certainly shows that there is much wrong with a system that decides that people are not worthy of receiving the benefit in the first place. Serious work has to be done on that.
      Finally, I refer to a point that I was not going to make until my hon. Friend the Minister intervened on my hon. Friend the Member for Clwyd, West (Mr. Thomas). I hope that no one with a sense of responsibility would want to create fear among people. However people may not provide their names when they make a complaint, because they fear that it will rebound badly on them. My hon. Friend the Minister was right to ask for evidence of that, but those people's life experiences might have taught them that they should not provide their names. They need reassuring that other people have won their appeals and suffered no adverse consequences. To people in that position I say, "Take courage, make an appeal, give your name and address and don't be afraid." However, people must be shown that they should do that.
      I know that my hon. Friend the Minister is deeply concerned about this issue. As someone else has said, the Government's response has his fingerprints on it. I welcome that response, but we need reform and we need it quickly. Bad decisions are being taken and, I am sorry to say, they are affecting the Government's reputation. People are becoming worried about how fair this Government are, and I do not want a Labour Government to suffer from such a reputation. I want us to make sure that people can say that the Government are fair to people because they deny benefit to con men, but provide it to those who deserve it.
      5.19 pm
      Mr. Desmond Swayne: It is always a pleasure to follow the hon. Member for Glasgow, Maryhill (Mrs. Fyfe) and I shall endeavour to be as brief as she has been. As a member of the Committee, I feel that I have had my say on the report and I am interested to hear what other Members have to say about it. The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) gave a lucid exposition of the report and an analysis of the Government's response, so there is not more that I wish to add.
      I wish to draw attention to one point, however. The evidence presented to the Committee was powerful in respect of the suggestion that Sema had made too lean a bid for the contract. To be fair, Sema inherited many of the difficulties that it now faces. After all, we have been told that there has been no increase in remuneration for eight years. Sema's problems did not arise suddenly but its low bid for the contract none the less gave it little scope to manoeuvre and address problems such as recruitment, pressures on doctors to accomplish examinations quickly, remuneration and particular difficulties with training. I wonder if the Minister can do anything to open up those issues before the contract comes up for renewal? I doubt it, but I hope that the hon. Gentleman will consider the matter seriously.
      I wish to draw attention to one other matter. The sessional doctors of whom we are often so critical are the self-same doctors to whom other people go for surgery consultations to get prescriptions to make them better. They are not different people. One may find an examination by one's own GP cursory, painful or uncomfortable, but that will not have the same psychological effect—in terms of humiliation and so on—as it does when one finds the sessional doctor insensitive or when he generates pain or discomfort or makes a cursory examination.
      Why are people prepared to accept that from their own GP but not from a sessional doctor? There is a psychological difference. People go to their doctor to be examined and given a cure for a problem, whereas a sessional doctor comes to see someone to examine whether they qualify for a benefit or—to put it bluntly—to make sure they are not malingering. Overcoming that barrier and psychological difference requires the sessional doctor to be much more sensitive than a GP has to be. That demands additional training which of course requires additional resources, which brings us full circle to the fact that Sema made too lean a bid for the contract.
      5.22 pm
      Mr. Andrew Dismore: I agree with the final point made by the hon. Member for New Forest, West (Mr. Swayne) and hope to return to that later.
      This is an opportune time to debate the issue. The report of the Select Committee on Social Security, together with the outcomes of the two seminars held by the Department of Social Security with Sema's officials at the end of last year, operated as a wake-up call for the Department by bringing to the fore criticisms of the Department's medical services, both when they were in-house and now that they have been contracted out. I welcome the Government's largely positive response to the report. I shall highlight areas in which, perhaps, there may be differences between the Select Committee and the
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      Government, but I hope that that will not be taken as detracting from the overall thrust of my remarks, which welcome the Government's response.
      I shall start with one or two points about the contract, especially the ratio of scrutiny to examination, which has been mentioned and which sounds very technical. The Committee was concerned that there may be other than logical reasons behind the falling ratio. The Government accept that our concern needs to be examined, and have identified several possibilities. When we considered the matter, the suspicion was put in our minds that the way in which the contract is formulated means that Sema can make money out of doing examinations not by seeing people but simply by going through the paperwork. If it does that and passes someone for benefit that person will not complain about receiving benefit—for obvious reasons. People who may not be entitled to benefit are potentially getting it, and the cost of that is passed on to a different part of the DSS budget. However, Sema is paid the same whether or not it does a full examination or an examination on paper, thus potentially finding a way of making profit out of the contract, which may not have been anticipated.
      I am pleased that the Government said in their response that they would view that with unmitigated disapproval and take decisive regulatory action if it were the case. I am pleased that they have given such a strong response to the suspicion expressed by the Select Committee and that they are studying the issue in more detail. If the falling ratio turns out not to have more valid causes, that is a serious matter that needs to be addressed.
      I am pleased also that the Government indicate that the contract with Sema allows the Department to share any financial savings if the ratio is found to have fallen for genuine reasons. I make a plea that, if those savings are identified, Sema and the Government should think about transferring the money to the wages of the doctors who, however one views the matter, are not getting a fair crack of the whip, for the reasons given by the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) when he opened the debate.
      The issue of complaints has loomed large in the debate. It is a bit rich for the Government to protest that the Select Committee worked on the basis of anonymous complaints. I listened carefully to my hon. Friend the Under-Secretary's intervention on my hon. Friend the Member for Clwyd, West (Mr. Thomas) on that point. The issue is that raised by the hon. Member for New Forest, West, and it is not that people are being victimised because they complain; there is no evidence of that and I have no reason to suppose that it is the case.
      We must, however, understand the power balance, or lack of balance, between the claimant, for whom the doctor's decision can mean the difference between living in poverty and being a little, or a lot, better off, and the doctor, to whom the claimant is just one of a dozen that he may be seeing that week. That power relationship inevitably affects the way in which the doctor and the claimant view each other, so even though there is no threat and, as far as I can see, no evidence of victimisation, claimants may perceive that, given the power that the doctor and the Department have over them, it is best to complain anonymously.
      I shall turn later to the issue of cultural insensitivity, on which we are again criticised for putting forward anecdotal examples. However, I submitted one of those

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      examples from my constituency case load, and I wrote to the Department about it 18 months ago, so the Department has chapter and verse on that case at least.
      We have to make it much easier for people to understand how they can make a complaint, and we have to work to overcome the fear that arises from the imbalance of power in the doctor-claimant relationship. I am pleased that the Government are considering ways of making claimants more aware of the complaints procedure, particularly for those who are examined in their own homes and who, at present, have no direct access to a complaints form.
      There is ground to be made up. The National Association of Citizens Advice Bureaux, which wrote to me about this matter the other day, said that it was not surprising that clients found it difficult to get copies of the complaints leaflet because it
      was not even listed in the Benefits Agency's most recent catalogue, issued in May 2000.
      If that is the case, the matter needs to be addressed.
      We heard earlier of the 88 per cent. satisfaction rate, but that gives rise to the question of when clients are asked whether they are satisfied with the examination. They have no way of knowing whether what they have told the doctor has been accurately recorded. I accept that if the record is later found to be inaccurate, that can give rise to an appeal, but there has to be a way of dealing with a complaint from a client who genuinely believes that what they have said has not been accurately recorded. At the moment, there is a lacuna in the procedure.
      My hon. Friend the Member for Clwyd, West pointed out the need for an accurate medical history. The Department rarely asks for medical records and notes from GPs and consultants. I fully accept the point made by the Department in its response, which is that in those circumstances doctors are primarily concerned with diagnosis, prognosis and treatment. However, like my hon. Friend, I was a personal injury lawyer. I practised in personal injury law for almost 20 years. I cannot recall a case in recent years in which the doctor preparing a report for use in court did not first ask to see the medical records.
      The supposition in the Government's response is that issues relating to disability and function might not be dealt with in such records, but, in fact, they are. I have looked at many dozens, if not hundreds, of records while preparing cases over the years, and they often contain that information. The questions that doctors in personal injury cases have to address in court not only involve prognosis, but are rooted in the need to deal with functional disability because that represents the lion's share of any assessment of compensation.
      Those doctors are asked to decide exactly the same questions with which Sema doctors deal, sometimes in medical examinations that last only a few minutes. They can do so because they get the history from medical records. It is important to get the history from the medical records when determining whether any pre-existing medical condition is relevant to the case because, with the best will in the world, I have found that many clients are not very good at giving a full account of their medical history. Such information is more easily and quickly obtained from their medical notes.
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      The kernel of all the complaints and submissions that we have received—and, indeed, all the discussions that we have had with hon. Members on both sides of the House during the Department's seminars and during the inquiry—is the way in which the Department treats people. I am concerned that the Department has not followed up our recommendations on claimants with mental health problems.
      A separate review of how claimants with mental illness and mental health problems are treated is necessary, because they are special and the doctors involved need special training, especially in considering the degree of functionality. I fully accept that additional training is being given and that the emphasis is being placed on a much more empathic, active listening approach, but such a review is needed.
      We criticised the services offered to members of ethnic communities in two main ways, the first of which relates to interpretation services. I am concerned that, as the hon. Member for Roxburgh and Berwickshire mentioned, the Government have not taken up our suggestion that there should be a multilingual notice. The reason given is that it is not consistent with the agency's practice. Perhaps that suggests that there is a question mark over the agency's practice, rather than over the recommendation.
      Coincidentally, the Select Committee paid an informal visit to my constituency this morning as part of our pensioner poverty inquiry. Some of this morning's discussions were with ethnic community groups from the Asian and Afro-Caribbean communities in my constituency. We considered take-up, claims and so on, and they made the point that a much more simple claims procedure and face-to-face explanations are needed so that people understand what is happening.
      We were given copies of the questionnaires that people must complete. The questionnaire that claimants must fill in is some 20 pages long. It is difficult to imagine people filling in those forms if English is not their first language. Completing the form would be bad enough if English was their first language. People may need interpreters because they do not speak English or have difficulty with it. That fundamental problem must be addressed. Similarly, the medical report form that doctors have to complete runs to 24 pages of questions.
      Without an adequate interpretation procedure, and even with interpretation, there is enormous scope for misunderstanding between doctors and claimants for whom English is a second language, or those who try to answer the doctor's questions through an interpreter. Many of the complaints that we have had from ethnic minority communities and those who advise them on such matters arise out of misunderstandings caused, as much as anything, simply by the complexity of those forms.
      I am disappointed to see from the Government's response that the Commission for Racial Equality has so far not been involved. From what is said there, that seems to be as much a problem of the CRE as of the agency. I hope that it can be much more involved in trying to deal with some of the problems, but we must not see those examples as merely anecdotal. I return to the fact that there is so much anecdotal evidence that it cannot be disregarded.
      NACAB wrote to me yesterday with a batch of other examples. First, a young Somali woman with chronic back pain was examined, although none of the physical

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      descriptors for incapacity benefit were mentioned. She was simply asked to hold out each arm. The doctor remarked that her English was very good "for a Somali". Secondly, a black woman lost benefit after a medical examination when, in a stage whisper, the doctor asked a colleague whether he thought that the client was "faking it".
      Thirdly, a Muslim woman felt unable to disclose details of her incontinence to a male Asian doctor. The client felt insulted. The doctor asked whether she was married. When she responded that she was single, she was asked whether she had any children.
      Fourthly—we have stressed the need for women doctors—a woman client was visited at home by an examining medical practitioner on a Saturday. The doctor made remarks about the client
      having a child out of wedlock
      and fell asleep on her sofa.
      Fifthly, a woman client was alone when a doctor called. The doctor asked the woman to go upstairs to the bedroom for a medical examination. The client declined and said that she was on her own, but would be examined on the sofa. The doctor did not want to do that and dismissed her symptoms and complaints.
      Mr. Bayley: My hon. Friend makes a powerful point to the House, but I am concerned that the Committee has neither investigated the allegations put to it nor asked the Department to do so. The allegations need to be investigated. As a Minister, I asked the Clerk of the Committee to provide the information on who those people are so that we can learn lessons from what happened, and I ask my hon. Friend to ask NACAB to provide the information, which it is often reluctant to supply or cannot substantiate. If it can provide that information, every case will be investigated because we want to get to the bottom of the problem.
      Mr. Dismore: I am grateful to my hon. Friend and, in those circumstances, I shall not cite the last case, which is perhaps the most appalling of all. I shall tell him about it afterwards. [HON. MEMBERS: "Go on!"] Oh, all right then, since I am being pressed. A woman client of Chinese origin was visited at home by an examining medical practitioner. The doctor asked the client a number of questions about how she came to England and how she "got her children in". The doctor pulled up the client's skirt, revealing her underwear. Unsurprisingly, the client was made to feel uncomfortable. Such behaviour is unacceptable and I am grateful to my hon. Friend for taking a firm view on that.
      I referred a constituent's complaint to the Department, with a full explanation. An Irish gentleman had fallen off a roof, suffering a badly fractured leg. When he went to be examined, he was asked whether he was drunk at the time. Assumptions are made about Irish people. I see the hon. Member for Belfast, South (Rev. Martin Smyth) nodding.
      Rev. Martin Smyth: Some of us are TT.
      Mr. Dismore: The hon. Gentleman makes his point from a sedentary position, and my constituent made exactly the same one, because he is teetotal and felt grossly insulted by the question. Stereotyping is the problem. In that respect, I am grateful to the Government
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      for saying that they adopt a serious approach. We must get to grips with these issues and we can do that by spending a little money on ensuring that proper interpretation facilities are available and that people can understand both the claims forms and what is expected of them during an examination. Above all, we must make the system a lot simpler.
      5.39 pm
      Mr. Andrew George: I congratulate the Select Committee on a first-class report and my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood) on his introduction to a constructive debate that has highlighted the fact that there is a degree of consensus across the Chamber. If Parliament is responsible for scrutinising the Government, we all have a responsibility to point out that the public out there—our constituents—are receiving a service that is clearly failing in a number of significant areas. We must put that right. That is why we are all present in the Chamber, and we should follow up the debate and ensure that the service is improved.
      I hope that the Select Committee will continue to press the Government. I agree with my hon. Friend the Member for Roxburgh and Berwickshire that the Government's response was helpful, but it contained a number of commitments for which there were neither targets nor timetables. I hope that the Select Committee will make sure that those commitments are met. One of the failings that has been highlighted in the debate is the uncertainty surrounding issues such as complaints, audit, pay and training. We need a firmer basis on which to assess the progress that the Government are making.
      I shall not repeat unnecessarily points that have already been raised, but I shall try to set the debate in a wider context—the need to ensure that disabled and sick people who want to get back into the job market are enabled to do so. The system should be designed not to stop disabled and sick people receiving benefits, but to focus on their abilities and to smooth their path from sickness and disability into gainful employment. That seems to be what the Government are proposing through personal capability assessments. At present the path is not clear and smooth; for many, it is a precipice, and the process becomes understandably stressful.
      I was one of the new intake of Members of Parliament, although we are not new any more. We all recognise that we do not have people queueing up at our casework surgeries to congratulate the Government on not taking their benefit away. They come to our constituency surgeries to complain when that happens.
      In comparison with the Child Support Agency, the medical services are not doing too badly—[Interruption.]—but as hon. Members say from a sedentary position, that is to damn with faint praise. The CSA is a rather poor benchmark against which to judge the performance of the medical services. Many hon. Members find that after the CSA, one of the most prevalent issues with which they have to deal involves the former all-work test, the problems with the medical services and the difficulties that people experience in comprehending how the system is supposed to work, even when their disability is clearly demonstrated by their evidence to their Member of Parliament.
      The number of appeals that we know about, and the proportion of cases in which appeals are upheld and benefits restored, show that the system is not working.

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      It is not working in a number of ways. If the Government intend to reduce to 10 per cent. the failure rate of the medical services to meet professional standards, they are setting the rate too high. Poor quality reports result in poor decisions. Although arrears will ultimately be reimbursed to those whose benefits are wrongly withdrawn, the process still results in trauma and poverty.
      In addition, to mount an appeal a claimant must obtain additional medical evidence, which may be costly. For example, Carol Simons, a Leicester resident who successfully challenged a decision to refuse her claim to incapacity benefit, had to pay £40 for additional medical evidence to support her appeal. A Leicester city council report reveals that charging for medical reports is widespread, with charges ranging from £11.50 to £60, with some doctors charging more than £100 an hour. Not only does withdrawal of benefit mean trauma and poverty, but an appeal to have it reinstated costs money. The disabled person is clearly not at fault, but he must still pay, and no one will reimburse him. Clearly, the system is failing there.
      From the disabled person's point of view, the system is self-policing. As has been pointed out, its approach to mental health is inadequate. The hon. Member for Hendon (Mr. Dismore) articulately described cases showing that ethnic minorities and others with language problems have also had to face prejudice and difficulties from the service.
      The British Medical Association has requested a meeting with the Minister and medical services, but has yet to receive a reply. As has been pointed out, the fact that doctors have not had a pay increase for eight years is clearly a matter of deep concern. The fact that the Government intend to apply valid measures of professional services, but have not worked with the BMA in devising them, is also a matter of concern. Free training for doctors has been dealt with inadequately, as a number of hon. Members have said.
      In September 1998, in a letter to my hon. Friend the Member for Bath (Mr. Foster), the Under-Secretary, the hon. Member for Wallasey (Angela Eagle) said:
      the intention is that a new fee structure will be introduced which will be linked to the quality and effectiveness of the work.
      The BMA informs me that it still awaits a new fee structure. Apparently, medical services offered a pay increase of 3 per cent. in February 1999, which the BMA rejected. We need to be clear about the status of those negotiations and what the Government intend to do to move them on. Clearly, doctors are unhappy about their pay, and one can understand why.
      In delving into the subject, I was concerned about whether the system could adequately pick up some of the less common illnesses suffered by those on incapacity or other benefits, and I looked up Guillain-Barré syndrome. I also looked up ankylosing spondylitis in the disability handbook published by the Department of Social Security. Its purpose is as follows:
      The handbook is intended primarily to help adjudicating authorities to assess the medical evidence presented to them.
      Ankylosing spondylitis is a condition that I have. I am sure that my intellectual handicaps are obvious to all, but my physical ones may not be apparent. I have only a mild form of ankylosing spondylitis and I did not recognise the
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      extent to which some people are crippled by it. It affects their legs and hips and they are unable to walk. That is not identified in the handbook.
      I contacted Professor Richard Hughes, who is head of the division of clinical neurosciences, about the Guillain-Barreé syndrome. I asked him to read the guidance that is provided in the disability handbook with regard to it. In his response, he stated:
      The section on 15.6 is so seriously inaccurate that I have been unable to revise it in any simple way.
      He offered an alternative text book for consideration. As I have said, Professor Hughes is the head of the division of clinical neurosciences of Guy's, King's and St. Thomas' school of medicine. It is clear from the two texts that the handbook attempts to diminish the potential impacts of Guillain-Barré and the way that it affects the patient. If that is the case with Guillain-Barré, to what extent is the rest of the handbook adequate in providing an accurate assessment for adjudication authorities when considering the evidence that is presented to them?
      I suspect that the Minister may comment on the fact that the Government are introducing personal capability assessments in one pilot area. To what extent has the Minister learned from these assessments and when will they be trialled or moved into other areas? Is there evidence that is helpful to the debate?
      We take the same view as the Government. We talked about personal capacity tests, while the Government call them personal capability assessments. However, we are considering the capability of a client rather than his or her incapacity. While we may argue about something being half full or half empty, we wish the Government to take a different approach. If we are to encourage and enable people who are disabled or sick to have work trials and to move back into the employment market, we need to support that with a social security system that allows them a smooth passage back into the world of work.
      Mr. Eric Pickles: The hon. Gentleman's points about personal capacity are interesting. Will he confirm that the medical test for the personal capacity assessment is identical to the one for the all-work test?
      Mr. George: The hon. Gentleman has asked me a question that I am about to ask the Minister. As far as I am aware—
      Mr. Bayley: The test for incapacity is exactly the same.
      Mr. George: I am grateful for that clarification. Perhaps the Minister will comment on the relevance of personal capacity assessments and the effect on our debate in his winding-up speech.
      The report provides a picture of a service that is driven by profit, and not necessarily by quality. From the report, medical services appear to provide the minimum that they can get away with and to maximise their use of the scrutiny rather than the examination method. Many doctors are poorly paid; many of our constituents have been treated brusquely and impatiently, and some have, sadly, suffered rudeness, insensitivity and racism. The system operates without a proper, independent complaints procedure or independent audit.

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      As I said earlier, the Government should reconsider their response to the Select Committee report and provide clearer targets and timetables to deal with the important issues that have been raised.
      5.56 pm
      Valerie Davey: I welcome the debate, and I know that constituents who have visited my surgery because they have suffered traumatic experiences as claimants also welcome it. I stress at the outset that my hon. Friend the Minister has always responded with understanding to the individual cases that I brought to his attention. He has looked into them, and I respect his concern for the subject that we are considering.
      If only a handful of cases existed, perhaps they could be tackled individually. However, through talking to other hon. Members, especially in the Bristol area, I have begun to perceive a pattern of anxiety. I therefore welcome the Select Committee's report, especially as its members visited Bristol and were able to take direct evidence. I welcome the reference by the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) to that experience.
      Wide experience has been gained by the Avon and Bristol law centre, to which many people have brought their cases. I want to draw on that experience in presenting four main points. The importance of communication is paramount. When the hon. Member for Roxburgh and Berwickshire mentioned his Bristol experience, he talked about the way in which dedicated professionals and people bringing complaints showed completely different sides of one coin. That is worrying, and I am glad that the hon. Gentleman brought it to light. As has also been said, if English is not a person's first language, the disparity and the scope for misunderstanding is even greater.
      The first point that the Avon and Bristol law centre emphasised to me was the importance of the Select Committee's recommendation that all claimants should be clearly told in initial correspondence with medical services that they have the right to request the presence of an interpreter. Like some hon. Members, the Avon and Bristol law centre was dismayed by the Government's response. It would like interpretation services to be expanded throughout the Benefits Agency rather than pulled back. It asks the Department to investigate further the cost and benefit of a policy that would mean greater use of interpreters. From my experience of constituents who have come to my surgery, I fully endorse the law centre's first point.
      Secondly, the Avon and Bristol law centre would welcome greater recognition by the Government that there are a small proportion of appalling reports and a larger proportion of substandard reports. It requests that other organisations—advice agencies and the BMA—monitor the reports.
      The Avon and Bristol law centre's third point is about racism. Based on its experience, it believes that the Government have been too dismissive of the Committee's findings. It supports greater participation by the Commission for Racial Equality in training doctors. It was felt that the Government should make a real commitment to the investigation, and to rooting out racism.
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      The fourth issue was that of complaints, to which many others have referred. The Avon and Bristol law centre feels that the whole procedure needs to be overhauled. It says that
      Consultation…with organisations such as the Law Centres Federation and the Federation of Independent Advice Centres, as well as NACAB
      would be welcome.
      The Bristol centre commented specifically that there had not been a single admission of fault, and that there had been no apology. Given the complexity of the organisation and the number of people involved, the failure to admit to a single mistake is inhuman. It is a reflection on the system that no one was prepared to make an apology, or to admit to a mistake.
      Nevertheless, I want to end on a positive note. I welcome the report and, indeed, the Government's response, which is positive on the whole and which—in the hands of the Minister—will, I trust, be explored and developed fully. Similarly, the Avon and Bristol law centre welcomed the commitment to a diploma course, which was seen as an important step. It also made special reference to the training that is now being recommended for those who must deal with people suffering from mental health problems. It said that mentally ill patients had specific requirements in terms of those dealing with them. I am sure that the provision of more training would be welcomed by all concerned.
      This is an important debate for many of the most vulnerable people in my constituency and those of my hon. Friends. I trust that the Select Committee's admirable report, which has done a remarkable job in a difficult sphere, will be taken on board by the Minister, the Department and the Government, and that the points made by the Avon and Bristol law centre will be considered.
      6.2 pm
      Ms Linda Perham: I, too, congratulate the Committee on its report, and welcome the Government's response. I also thank the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) for letting me know—as a person who signed the early-day motion—the timing of the debate. As I am sure many hon. Members know, on Thursday afternoons, the calls of the constituency are sometimes greater than those of the Chamber.
      The great majority of cases concerning problems with disability living allowance or incapacity benefit that come to me concern assessment by Sema, on behalf of Benefits Agency medical services. People who have been unable to walk a few steps from their doors to my surgery have been assessed as "fit for work". In those cases, there have clearly been shortcomings in the conduct of medical examinations, especially with regard to the time that they have taken. Others have mentioned that.
      In some cases, a doctor has been present for only 10 or 20 minutes, and a report has subsequently stated that the person concerned was able to engage in an activity for much longer. On at least one occasion that I remember, an assessment included comments on a person's appearance. For instance, someone was described as an "obese lady". That person was very upset when she saw the report.
      A woman who lives near me in north Ilford has been unable to work for nearly 20 years because of her spinal problems. Over the years, when examined by doctors at

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      our local practice, at local hospitals and by those whom she describes as "Government doctors", she has been told many times that her condition can only worsen. According to a letter that I have from her, the examining doctor said that she could not sit comfortably for more than two hours. She says that she cannot sit comfortably for more than 10 minutes. No points! The doctor said that she had no problem with rising after sitting down; she says that she cannot get up without holding on to something—"usually my husband". Again, no points The doctor says that she cannot walk more than 800 m without stopping or severe discomfort. She says that she cannot walk more than 200 m without stopping or severe discomfort—again, no points on that assessment.
      Looking through the report's recommendations and the Government reply, I can say on behalf of my constituents that a good number of their concerns have been addressed. They include the time spent with claimants, which my hon. Friend the Member for Clwyd, West (Mr. Thomas) covered in some detail; the quality of reports; the recruitment, training and monitoring of doctors, which is important, and how poor performance is dealt with; and communication difficulties and providing interpretation services, which my hon. Friends the Members for Bristol, West (Valerie Davey) and for Hendon (Mr. Dismore) highlighted. He also touched on the availability of female doctors to examine women, especially those whose religious or cultural background precludes contact with males outside the family circle.
      The complaints procedure was another concern. From looking at the report, Sema is conducting a review, but it is disturbing that so many claimants are appealing, rather than complaining. That is dealt with in the Government's response.
      All in all, it is a thorough and much needed report. I look forward to improvements in service for a lot of anxious and deserving people, who are already facing lives full of frustration and pain.
      6.6 pm
      Dr. Peter Brand: I welcome the report. I have practised as a general practitioner for 25 years and have had to go through the agony of some of my patients' contact with the Benefits Agency in its medical manifestations. Not much has changed to date. In fact, matters got a lot worse during the dreadful benefit integrity project, when there seemed to be a witch hunt.
      The thing that concerns me most is that we are asking doctors who work for the Benefits Agency—they did so in the past directly, but now do so through Sema—to do their job wearing a blindfold, or blinkers at best. As the hon. Member for Clwyd, West (Mr. Thomas) pointed out, history is important when making an assessment, but so is examination and having access to the result of investigations. We do not have an integrated system where relevant knowledge is made available.
      We are not just talking about disbursing £25 billion of public money, although it is right that we should take that seriously and target it at the right people. Decisions by the Benefits Agency can have a dramatic impact on people's clinical outcomes. For the Benefits Agency to say, "Go back to your doctor and get another certificate," adding in brackets—it is never stated—"Make sure that it is for a
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      different condition, so that we can restart your claim," is nonsense. A doctor can write a further certificate, but that does not reinstate the benefit for that patient, unless we are being particularly clever about something.
      One sometimes sees the real effect. We get these amazing decisions by the examining doctors who will not accept the history given by the patient and who will not take steps to ensure that investigation results are available to them. That means that the appeal mechanism gets triggered, if the patient is well advised. However, many patients do not have that level of advice.
      The internal system that BAMS used to have, and which still exists, involves having an assessor. Those decision makers are not competent either. I do not think that they are empowered to ask for more information so that a reasonable decision can be made.
      I urge the Minister really to examine the contractual relationship between the Department of Social Security and the Department of Health, so that the Benefits Agency can buy more relevant information from the national health service. I realise that that information is not a free good and takes time to produce. Although I take the point made by my hon. Friend the Member for St. Ives (Mr. George), doctors are busy people and are expensive. Their time will be paid for either by the national health service, as part of their contract, or by a fee of some sort. I think that it would be helpful if the fee were a bit more up-front than it is now. The routine bits of paper that doctors are asked to fill out are of so little value that they really are not designed to give the Benefits Agency the information that it should have.
      As I said, we are debating not only the disbursal of £25 billion, but a clinical matter. In the past few years, I have had a couple of cases that are perhaps relevant to this debate, one of which involved a relatively young man with unstable angina. He was trained to be a builder's labourer. He was not a very bright chap. He was assessed under the all-work test and was told that he was fit to go to work. However, he was not competent to do anything except heavy physical work—no other job was available to him.
      The man was driven back into work, until I stopped him by telling him that he would drop dead. I am very glad to say that, soon after, he had his heart surgery. Now, he is much more stable and is even back at doing some good physical work. However, he is doing that within his own limitations.
      In the letter that I wrote for the man—incidentally, I did not charge for it—I asked the Benefits Agency who would represent it at the coroner's court should he drop dead after returning to work. I did not receive an answer from the agency, but it reinstated his benefit. It really is appalling that one has to go to such lengths to achieve the right result.
      Another case involved a man who was a gas fitter—which involves lots of crawling around little holes and turning one's head upside down—and had an unstable spine. He had very clear neurological signs, down his legs and his arms, of an unstable cervical spine and was awaiting surgery for it. Again, a clever person said that he was fit to go to work. If that man had continued in his job, he could have become a tetraplegic. Again, it was necessary for one to make that point so clearly, although any clinician worth his salt would have worked it out.

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      The Government acknowledge that there is an extraordinarily high rate of success in appeals. I must congratulate my constituent, Dr. Ralph Gasson, who is a doctor of divinity and devotes his life to representing people at appeals. He does lots of them, and has a better than 90 per cent. success rate. There really is something wrong with a system that allows that to happen.
      In response to the Select Committee, the Government said:
      A successful appeal does not necessarily indicate that the medical report was substandard.
      I think that that is nonsense. A successful appeal may not indicate that the medical examiner was substandard, but it does indicate that the methodology for acquiring the medical information required for the report was extremely substandard.
      People should not have to have an appeal before receiving what they need. Let us face it, benefits are just as much part of the health package as any direct medication, physiotherapy or occupational therapy.
      My final plea—I do not think that this issue was addressed by the Committee—is that we should have not only a better and smoother way into work, with better therapeutic earnings allowances and tax credits, but a way of dipping into work and coming out of it again if it does not work out. Many people are reluctant to take that step because they know that their mortgage interest payments, for example, will not be reinstated until quite a long time after they have discovered that they cannot cope. That is particularly important in respect of mental health, but it also applies to other areas.
      Generally, people are keen to make a contribution, but the present system seems either to goad them with very crude pushes or to put up barriers. I hope that the excellent report by the Select Committee will goad the Government into taking positive action.
      6.15 pm
      Mr. Eric Pickles: It is a great pleasure to follow the hon. Member for Isle of Wight (Dr. Brand). He was looking rather ashen-faced when we were discussing doctors' remuneration, but we are grateful that he stayed. I found his final point about people coming off benefit most interesting. Last year, the Minister and I served on the Standing Committee considering the Welfare Reform Bill, which made certain changes to protect the benefit claimed by disabled people. That was a welcome step and it might also be appropriate in respect of incapacity benefit.
      I, too, would like to congratulate the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) on an outstanding report. I know that we always thank the chairmen of Select Committees and say that they have produced thorough reports that we are pleased to debate, but this is an excellent report. Since I have been a Front-Bench spokesman on these issues—and it has been two years now—I have been fortunate enough to consider a series of really good reports at a time of quite rapid change in social security. I am most grateful to the hon. Gentleman and the Select Committee.
      I do not want to cause the Minister any embarrassment or discomfort by saying that the Government's response to the report is well rounded and most welcome. It is sensible in its general approach, with one exception, to which I shall turn in a few moments.
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      The report deals with a service that is undergoing an enormous transformation. After all, it is only a relatively short time since the Government took the sensible decision to privatise the service, and it is fair to say that it is a good idea to monitor the great changes that are under way.
      At times during the debate, we rather lost sight of what the Government were seeking to achieve, which is set out on page 1 of their response:
      The Government chose the option of contracting-out because it believes that the public is entitled to good quality public services. What matters is what works.
      A couple of weeks ago, a Labour Member reminded me about a quotation from Deng Xiaoping, who I think is very new Labour in his general approach to most matters. He said that it did not matter whether the cat was black or white, so long as it caught mice. I feel that the report enshrines that general principle. We stand by the Government's privatisation programme and hope to see more.
      There have been considerable changes during the inquiry and since the report. We know that, generally, better accommodation has been available in which to carry out examinations; there has been a shorter waiting list; waiting times have been reduced and there have been some improvements to the audit system. However, the Select Committee was quite right to identify problems with regard to quality, timing and, most crucially, training.
      The hon. Member for Roxburgh and Berwickshire talked about benchmarks and said that it would have been better to have had some idea of how bad the system was before the process started. The hon. Member for Belfast, South (Rev. Martin Smyth) gave us an idea as to what the system was like before the changeover, and how it operates in his constituency. There was also a problem in respect of the specifications of the contract that was sent out. That is a common difficulty in central and local government.
      It is a common problem that people become anxious about matters that are not in the contract. The Committee's report mentions structural problems, and there is always some tension about omissions from contracts. When I was on a Select Committee, we had discussions about specifications for railways and we had an interesting witness appear before us. I asked him why problems were experienced in meeting the specifications and he said, "As a general rule, meeting specifications within a contract is a bit like walking on water. It is easy to do if both are frozen." In this case, items missing from the contracts have created much of the problem.
      It is indicative that the contracts contained no medical quality targets, only medical standards. My hon. Friend the Member for New Forest, West (Mr. Swayne) mentioned the problem of lack of pay for training, but much of the training requirement was additional to the contract. Of course, Sema bid on a tight basis for the contract and has ended up funding things that were not part of the contract price. In the process of re-examination of the contracts, we should perhaps ensure that quality targets are included in matters that are put out to tender.
      My experience of such matters goes back eight or nine years and I believe that things are getting better. Hon. Members have described the current problems, and dreadful cases still arise to which hon. Members will wish

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      to alert the Minister, but there is a general feeling of improvement. Much of the frustration that revolved around the old all-work test was really about assessment, because, before the changes were made, there was no real way to judge matters.
      I have some points to make that may be unfashionable and go against the general tenor of the debate with regard to desk-top scrutiny. I accept what the hon. Member for Hendon (Mr. Dismore) said about the risks, but there is a risk the other way. It would be worse if, in order to prove that everything was above board, we forced people to go through medical examinations when it was obvious from the medical documentation and case history that there was no need for them to do so. I cannot see the point of putting people through the anxiety of a medical examination when it is obvious that they will not pass it. The hon. Gentleman is right about the need for proper scrutiny, but it would be wrong to force people into medical examinations, thereby increasing the waiting list, for reasons of financial control, when their illness is evident.
      I said that the report was excellent. However, the response on mental illness was rather smug. There was something of the Mr. Nicely-nicely about it that I found unacceptable. The Committee's recommendation (h) is that
      the Chief Medical Adviser instigates a review of Medical Services' treatment of claimants with mental health problems.
      That is a good recommendation that will improve the whole process.
      Paragraph 33 states:
      Recently as part of the Personal Capability Assessment (PCA), development and thorough evaluation of methods assessing effects of mental health problems on ability to work, have gone some way to meeting that challenge.
      I think that that is wildly optimistic, and that the changes have gone only a little way in that direction. Baroness Hollis said last year:
      There are 200 advisers in the field who have gone through an average of 200 hours of training—and in some cases 300 or 400 hours—working towards established qualifications such as NVQ3.—[Official Report, House of Lords, 13 July 1999; Vol. 304, c. 214.]
      That gives an idea of the logistical problems facing Sema in getting training in place.
      The briefing that all hon. Members have received states that Sema is putting doctors through a three-day induction course, which will deal with cultural awareness, mental illness, post-traumatic stress, disability discrimination and chronic fatigue syndrome. That is all very sensible, but the nature of people receiving incapacity benefit is changing. Twenty-odd years ago, 9 per cent. of people had a mental illness; 10 years later, in 1988, the proportion was 16 per cent., and last year the figure was nearly 30 per cent.
      We cannot say that significant changes have been made in the process of benefit payments when forms such as the one displayed a little while ago by the hon. Member for Hendon place so much emphasis on physical condition. The forms for incapacity benefit and disability living allowance are difficult for people with a mental illness or disability to complete and thereby make a claim.
      Hazel Ruane of the National Schizophrenia Fellowship wrote a letter on 14 June to my hon. Friend the Member for West Chelmsford (Mr. Burns). It was passed to me by
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      my constituent Mrs. Murphy, on whom I rely for up-to-date information on the care of schizophrenia. The letter states:
      In fact, the plight of persons who are currently unemployed for reasons of mental ill-health is being made far worse by the present, growing trend of summarily stopping the payment of disability allowance for sufferers of schizophrenia, manic depression and other serious disorders. This may be an attempt to improve the statistics leading to the next election when, no doubt, there will be some self congratulation from the government regarding supposed achievement of manifesto targets… So, far from improving the implementation of care in the community, this haphazard termination of disability allowances is bound to damage it entirely.
      A similar letter was sent to the Secretary of State.
      There needs to be a balance to ensure that people with a mental illness or disability are not excluded from employment. We do not suggest that such people should be excluded from getting work, but the balance must be considered very carefully, and with sensitivity.
      I have a couple of illustrations. I recall seeing the Minister and some Labour Members a couple of days ago at an Alzheimer's Disease Society reception. I talked to a lady there who had been through the assessment process. She had been asked whether her husband could walk a particular distance. Of course he could—her worry was whether he could find his way back home if he wandered off while he was walking that distance. That was not taken into account during the scrutiny of the case. She had to fight very hard to get that idea across.
      As for schizophrenia, there was a difficult case at my advice surgery involving a constituent who had gone through the process. Her son was asked how high he could raise his arm above his head, but my constituent was more concerned about his ability to organise his affairs.
      Someone who suffers from manic depression may give a false impression of their state of health. If manic depressives are asked how they feel, they say, "Life is wonderful, I feel great. I can do anything; I'll apply for anything. I really want to go out to work." Then, with just a click of the fingers, everything changes. That is not catered for in the forms and the way in which the assessment is made.
      We have come a long way in the way that people with a mental disability are treated. However, we are a long way from achieving the sensitivity that is necessary for the various medical assessments. Life is pretty much stacked against people who are mentally ill or suffer from a mental disability. We must deal with them sensibly, and the tests that we apply should reflect that.
      We all received briefing documents today from MIND, which supports the report of the Select Committee on Social Security. Given the narrow nature of our objection to this report, which by and large we endorse, I ask the Minister to look again at that recommendation and see whether he can change the Government's mind with regard to reassessing the process, from the form onwards. If he succeeds in doing so, that would be the icing on the cake for this excellent report.
      6.32 pm
      The Parliamentary Under-Secretary of State for Social Security (Mr. Hugh Bayley): I start by echoing the sentiment expressed by many right hon. and hon. Members in thanking the Select Committee on Social Security for producing this report. The Chairman and

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      members of the Committee have provided a service to the House in throwing a spotlight on an area of public policy that needs to be improved. The Government are strongly committed to improving both the administrative efficiency of the way in which medical reports relating to benefits are conducted, and the medical quality of those reports.
      Let me start with the quality of the service that we inherited from our predecessors when we came to power three years ago. Our view was that the previous in-house service—the Benefits Agency medical services, or BAMS—was not performing satisfactorily in the areas of administration or medical quality. One of the first tasks in which the Government engaged after the election was to consider ways of changing the culture within the medical service and improving standards of service to the public.
      We decided that we would be more likely to achieve the changes that were necessary by making a fresh start with a new organisation. That was fundamental to the decision to go ahead with putting the work out to contract. That was based on many years of experience of running an in-house service.
      Contracting out the service meant that standards of performance had to be defined, which had never happened before. They had to be put on paper so that people knew what was expected of them and performance could be measured. That was done in the contract, and data are collected monthly to compare performance in medical services against the standards set out.
      Some of the standards are administrative. For example, there is a requirement that 95 per cent. of incapacity benefit examinations should be conducted within 50 days. In September 1998, when Sema took over the contract, achievement of that standard was 75 per cent. Now, the target has been hit in all three areas of the Sema contract. By April 1999, it had been achieved in the south-western area; by June 1999, it had been achieved in the north; and, by November 1999, it had been achieved in the south-east.
      A second administrative requirement is that 95 per cent. of disability living allowance examinations should be conducted within 20 days of being requested. In September 1998, when Sema took over the contract, only 62.5 per cent. of examinations were made within 20 days. That was the standard of performance inherited from BAMS. Now, 95 per cent. has been achieved in two of the three areas. The target was hit in the north-west last October, and in the south-west in November. The target is still not met in the south-east, however, where 87 per cent. of DLA examinations were conducted within 20 days in May. Improvements remain to be made. None the less, there have been major, measurable and demonstrable improvements in the administrative efficiency with which Sema provides a service.
      Other standards in the contract relate to the quality of medical work conducted by doctors. For example, the proportion of reports graded A, B or C is measured. As the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) said, a C report is not fit for purpose, a B report is fit for purpose but not perfect, and an A report fully meets all requirements under the contract.
      A further example of medical quality standards is the proportion of doctors who complete required training. As I told the Committee some months ago, we have not yet seen a demonstrable improvement in the medical quality of the work being carried out. There has been no deterioration, but no improvement either. I am concerned
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      about that. Our principal aim in contracting out the service—we had many aims, but this was the main one—was to improve the medical quality of reports written by doctors. Sema shares our concern, and we—in the shape of the Government's chief medical officer—will work closely with the company to improve the medical quality of reports and the quality of customer service provided by doctors.
      I shall say a little about standards of customer service. Sema employs more than 3,000 doctors, most of whose work fully conforms with the standards set out in the contract. Good practice in terms both of medical quality and customer service is the norm, but there are still too many cases—a small minority, but too many—of bad practice. All complaints are investigated, and we find some are justified and others not. In some cases, where there is a conflict of report between the benefit claimant who has complained and the doctor who conducted the report, it is simply impossible to tell where the truth lies. We must address that matter.
      The Select Committee's discovery that there was a problem over the public perception of Sema and its predecessor, BAMS, was not new. Before the Committee instigated its inquiry, I had called two meetings for Members in the House—as the hon. Member for Roxburgh and Berwickshire acknowledged—so that they could give me case studies that demonstrated their concerns. I wanted to collect and learn from such examples in order to discuss the problems with colleagues. I also wanted to explain the improvements that we are undertaking: in recruitment standards; postgraduate medical education; in-service training; the base for professional standards—the new diploma in disability assessment medicine; and in the quality of clinical advice to doctors.
      I held two meetings because there was such a large response from hon. Members who wanted to express concern; so many wanted to attend the meeting that they could not reasonably be accommodated in Committee Room 14. Those meetings may have been one of the many factors that prompted the Select Committee to investigate the matter.
      To follow up those discussions with colleagues, I convened—with the help of the National Association of Citizens Advice Bureaux—a series of regional meetings throughout the UK, so that welfare rights advisers from CABs, local authorities and other bodies could share with us their experience of problems with the service. That was extremely useful. As a result of those meetings, Sema is revising its complaints procedures, as we recorded in our response to the Committee's report; that action was welcomed by many hon. Members.
      I shall outline my priorities, as the responsible Minister, for the year ahead. Above all, I want to achieve significant improvements in medical quality. I took advice from the Department's chief medical adviser on which of the indicators that we use regularly to collect data under the contract best showed medical quality. In our response to the Select Committee, my right hon. Friend the Secretary of State set out challenging targets for Sema on four specific matters.
      The first was that, within one year, the percentage of C grade reports, across the whole spectrum of benefits, should be reduced to less than 5 per cent. I point out to the hon. Member for St. Ives (Mr. George) that we do not

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      want a reduction to 10 per cent. In the first six months, we want the proportion reduced by 10 per cent., with a reduction to 5 per cent. overall. The figure of 5 per cent. is higher than I would like, but is nevertheless a challenging target to meet in a year. Sema will have to work extremely hard to hit that target. We believe that it is achievable—as does Sema—but it will not be easy. If we achieve that target, we shall consider how we can do even better in the years to come.
      Secondly, within one year, we require Sema to improve its compliance with the scrutiny guidelines for incapacity benefit claims so that the proportion of non-compliant reports falls below 5 per cent.
      The third target is that, within one year, we require Sema to deliver training for all doctors in three categories. We have decided to set outcomes as a target—the fact that doctors complete the training courses, rather than that they undergo a specific number of days of training.
      We, jointly with Sema, have selected three categories. First, there is to be a course on assessment of people with mental health problems, which is an issue that several hon. Members have raised. Secondly, there is to be disability awareness training. Thirdly, Sema has developed a new training package on how to avoid creating distress among people with musculo-skeletal problems—the biggest single group of people claiming incapacity benefit—by using what I would describe in lay terms as a hands-off examination process so that, where there is an alternative, people are not manipulated and do not have their joints moved by the doctor. Of course, on occasions, manipulation will be necessary, but the package covers alternatives to that.
      Our fourth target is to improve customer satisfaction rates by 90 per cent. within two years.
      After setting those targets, not before, the Government discussed them with Sema. Therefore, they were not targets set by a process of bargaining or negotiation; they were targets set by the Government because we believe that they are attainable, and we believe that they will make a significant difference or reflect a significant improvement in medical quality. We have since discussed them with Sema. It agrees with us that they will be extremely challenging, but it also agrees with us that they can be met.
      I shall now respond to the contributions that hon. Members have made to the debate.
      Mr. Kirkwood: Those are very helpful confirmations. Do I understand the Minister to be saying that those performance improvements are being required of the contractor without any compensating financial allowances?
      Mr. Bayley: Yes; that is exactly what I am saying, and those targets are targets which the contract itself requires a contractor to meet, so it is not a matter of requiring a contractor to do anything other than what the contract already states. We set the contract in order to drive up medical standards. We have not seen that reflected in the monthly reports. We want to see it reflected. Sema, too, wants to see it reflected. That is our approach.
      Perhaps I should comment on a point raised by many hon. Members, including my hon. Friend the Member for Clwyd, West (Mr. Thomas) and the hon. Member for
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      Roxburgh and Berwickshire, who were unhappy with the concern expressed by the Government that no attempt had been made to check the reports of fault with medicals that had been brought to the Committee's attention by citizens advice bureaux and quite a wide range of voluntary bodies. I am not in any sense, and nor are the Government, complaining that the Committee should not collect that sort of evidence.
      As I explained in an intervention in the speech by my hon. Friend the Member for Hendon (Mr. Dismore), the reason that I became worried was that I wanted to investigate some of the complaints to find out what had happened. Perhaps I can explain my concern to the House by focusing on one group of complaints—the group of complaints about racism or cultural insensitivity. In the report, the Committee cited five identifiable but anonymous cases. The Committee, because it had received information about those cases anonymously, could not give us information—even confidentially—to allow us to identify those cases.
      We have been able to identify two of the cases from the circumstances described by the Committee, and in both cases the Committee's description of the circumstances accurately reflects what happened. In both cases, the doctor concerned, who had behaved quite inappropriately, was suspended and retrained. Both doctors are now back at work. Obviously, their work is being monitored in the way that one would expect after such an occurrence, and no further complaints have been received.
      I simply put it to the House that the complaint has been made, and that inappropriate behaviour has occurred in a very few cases, quite reprehensibly and quite wrongly, but that in response the Government have done exactly what the Committee and the House would expect us to do—to suspend the doctor, to address the issue through training and then to monitor the change in the performance of the doctor that occurs after training. My hon. Friend the Member for Hendon cited several other cases, and I hope that he can persuade his informants to release the facts about them, so that we can examine them closely.
      The hon. Member for Roxburgh and Berwickshire made an interesting and important point about benchmarking. Had the contracts gone to three different companies, we would have been able to benchmark one company against another. I am considering the issue further, but we can, to some extent, benchmark between the different areas. In relation to administrative efficiency, I said that we were able to compare the performance of each of the three areas. That is useful, but we may be able to consider other ways of benchmarking. I need to inquire into that further.
      The hon. Gentleman, like my hon. Friend the Member for Hendon and the hon. Member for New Forest, West (Mr. Swayne), asked whether enough money was in the contract to deliver it. We expect Sema to deliver a 4 per cent. saving each year, which is broadly what would have been required of BAMS if it had remained an in-house contract. I confirm that Sema expects to make a profit on the contract, although it expects to make less of one than it would on an information technology contract in the sector in which it has been working for a long time.
      When one contracts out a service for the first time, it is difficult for us as a Government, and for those bidding for the work, to get costs right. We had an open-book

      511
      policy and bidders were able to examine the way in which we conducted the work, to examine our expenditure and to look for ways to make management savings. However, when a private firm bids for a contract, it hopes to make a profit and it also accepts risk. That risk justifies the profit, and it would be intolerable if the Government were expected to remove all risk and to contribute large profits to companies when they bid high and obtain the work. Some Members on the Opposition Benchers are nodding agreement, and if a company bids low, it must accept the risk attached to that. Nevertheless, we believe that the cost of the contract is broadly comparable to what the service would have cost in-house and that it is perfectly achievable. Sema also takes that view.
      My hon. Friend the Member for Hendon raised an interesting point when he asked why we did not negotiate to get some money back because of a fall in the scrutiny ratio, and then redistribute it in the form of remuneration to doctors. In a roundabout way, that is what we are doing. I told the Committee that, each year, we have an annual negotiation over the cost of the contract with the contractor. We make various bids for the return of moneys when, for example, there is a fall in the scrutiny-to-examination ratio, and the contractors make bids for additional costs that are not covered in the contract.
      This year a six or seven-figure sum has been returned to the Department in relation to costs that have not been incurred by the company, and those include the costs not incurred in scrutiny cases. We have also decided to pay a similar sum—albeit not such a large one—to the company in respect of additional work principally for the introduction of a personal capability assessment. Although the incapacity element of the personal capability assessment test is exactly the same as for the incapacity and the all-work test, an additional part of the test examines personal capacity. Therefore, in a roundabout way, the Government are saving money on scrutiny and it is being recycled to the contractor to pay for more extended medicals in the form of personal capability assessments. That will be reflected in the expenditure that the company makes on doctors and doctor's time.
      I return to the point about multilingual notices. Perhaps I should start by saying by saying that, on reflection, I do not defend the statement in the Government's response which says that as we do not have multilingual notices in the form suggested by the Select Committee in other parts of the Benefits Agency, that is a jolly good reason for not having them in BAMS. I agree with hon. Members on both sides that that is not a good argument. One should look at the merits of the case, and I give the House an undertaking that I shall do so.
      Incidentally, it is not true that we do not have multilingual notices. The Service First unit in the Cabinet Office produced a report on the attitudes of people from minority ethnic groups to Government services. People were asked whether they were aware of the fact that services provided by various Departments, such as leaflets, audio and video tapes and interpreters, were available in their own languages, and whether they found that useful. I am not wholly satisfied, but I am pleased to say that the Benefits Agency came second on that list,
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      after GPS, but above 31 other Government services, including NHS hospitals, local councils, libraries, primary schools, citizens advice bureaux, council house services, and so on. Twenty-six per cent. of people from minority ethnic groups were aware of the provision of services in their own languages and 17 per cent. said that that was useful.
      Mr. Pickles: The hon. Gentleman should be complimented on his straightforwardness. Will he tell the House which of his ministerial colleagues approved the text of the Government's response?
      Mr. Bayley: The responsibility was mine. I shall be frank with the House, as I recall putting a red line through a certain sentence, but I failed to see that through to the end. I do not defend the statement, which I believe to be wrong. We shall continue to investigate whether we could improve our language and translation services.
      A wide range of matters were raised by hon. Members, some relating to training and the payment of GPs for undertaking training to do DSS work. Under their NHS contract, GPs are required to spend the equivalent of five days a year on training and, as independent contractors, they are not paid for that. The training regime operated in BAMS is broadly the same. The training is provided free, and doctors do not have to pay for the courses, but have to attend in their own time. Most of our training will give doctors credit against their GP training requirement—which they would have to do anyway—which will help to deal with the problem of their reluctance to undertake training because they are not paid for the training sessions. If the training is of a medical nature, such as mental health assessment or looking at medical conditions, that counts against the GP training requirement. However, it will not count if it is to do with the way in which the benefits system works.
      My hon. Friend the Member for Clwyd, West urged the Government to try and capture feedback from appeals. As the hon. Member for Roxburgh and Berwickshire knows, five years ago, I raised that issue as a constituency Member of Parliament with the Benefits Agency. We do not think that simply collecting the results of appeals would give a good indication of whether the doctor's report was good, as many other factors are involved, such as whether the reports of the GP, specialist and decision maker are good reports. Judge Harris, who runs the tribunal service, has given me a commitment that he will look at whether we could investigate if, for instance, a chairman of an appeal believes that a particularly poor medical report has been provided. The chairman could draw that to the attention of our chief medical adviser and we could investigate.
      Time moves on, so I shall summarise. The Government are clearly demonstrating commitment to improving the medical quality of our reports, and customer care, by setting four challenging new standards. The goal, of course, is to improve the quality of the service to the public, and the Government and Sema will work together closely to see that that is achieved.
      It being Seven o'clock, MR. DEPUTY SPEAKER proceeded, pursuant to Order [25 October 1999], to put the Questions necessary to dispose of proceedings.

  ESTIMATES, 2000–01

    Class XVI, Vote 4
    Resolved,
    That a further, revised sum, not exceeding £482,077,000 be granted to Her Majesty out of the Consolidated Fund to complete or defray the charges which will come in course of payment during the year ending on 31st March 2001 for expenditure by the Customs and Excise Department on the administration of taxation; the operation of customs and revenue controls and other Customs and Excise-related services; and payments in respect of Shipbuilder's Relief and the Customs and Excise National Museum.

    Class XII, Vote 3
    Resolved,
    That a further, revised sum, not exceeding £1,110,424,000 be granted to Her Majesty out of the Consolidated Fund to complete or defray the charges which will come in course of payment during the year ending on 31st March 2001 for expenditure by the Department of Social Security on administration, for agency payments, expenditure incurred as part of the Welfare to Work initiative, expenditure on behalf of the Department of Health, and for certain other services including grants to local authorities and voluntary organisations and other organisations.

  ESTIMATES AND SUPPLEMENTARY ESTIMATES, 2000–01
  Resolved,
  That a further sum not exceeding £133,029,399,000 be granted to Her Majesty out of the Consolidated Fund to complete or defray the charges for Defence and Civil Services for the year ending on 31st March 2001, as set out in HC 374, 375, 376, 377 and 567.
  Ordered,
  That a Bill be brought in on the foregoing resolutions: And that the Chairman of Ways and Means, Mr. Chancellor of the Exchequer, Mr. Andrew Smith, Dawn Primarolo, Miss Melanie Johnson and Mr. Stephen Timms do prepare and bring it in.

  CONSOLIDATED FUND (APPROPRIATION) BILL
  Mr. Stephen Timms accordingly presented a Bill to apply a sum out of the Consolidated Fund to the service of the year ending on 31st March 2001; to appropriate the supplies granted in this Session of Parliament; and to repeal certain Consolidated Fund and Appropriation Acts: And the same was read the First time; and ordered to be read a Second time tomorrow, and to be printed [Bill 151].

  Illegal Camping
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Allen.]
  7.1 pm
  Mr. Mark Todd: South Derbyshire is a largely rural district to the south and west of Derby. It is increasingly well connected to the road network, with the A50 Stoke-Derby link running across the constituency and with the MI to the east. It features in many routes through the midlands. It is thus an increasingly attractive stopping point for travellers.
  My concern today is the impact that illegal occupation of sites by travellers and those who claim to be travellers has on the perception and reality of local law enforcement. My constituency has faced regular occupations during the past three years. There have been several occupations of Highways Agency property in the Foston area. In Findern, the village where I live, there was a lengthy occupation of a site whose owner was unknown, which made proceedings difficult. Last summer, the common at Church Gresley, a heavily populated area on the edge of Swadlincote, was occupied by 22 caravans, legitimate users were threatened and sports pitches were made unusable. When the occupiers left, the council spent £2,500 of taxpayers' money clearing the common.
  Recently, land on the edge of Willington was occupied. When it was abandoned, the scene resembled a war zone full of abandoned, burnt-out cars. The Highways Agency cleared the site at public expense and introduced expensive security measures to prevent a repetition.
  There have been many short-term incursions, some of which have caused little concern. Since 1994, the district council alone has had to obtain in all 44 court orders for possession. The onus in each case of which I am aware was on the site owners to obtain possession orders and eventually to enforce them, except that of the land at Findern, where the district council sought an order as no owner was forthcoming. It is, therefore, reasonable to assume that other landowners in the area—especially the Highways Agency, which has suffered greatly—have had to take out many court orders.
  Police action has been limited to observation, vehicle checks and assistance with serving the orders, apart from taking action concerning one stolen vehicle, to which I shall refer later. On no occasion was section 61 of the Criminal Justice and Public Order Act 1994 used, under which the police are allowed to direct occupiers to leave a site if more than six caravans are involved, threatening behaviour has been used or damage is evident. On only one occasion has any attempt been made to recover the cost of damage and waste disposal.
  From my questions to the Government, it seems that powers available under section 59(8) of the Environmental Protection Act 1990 reserved for this purpose are seldom used. It is, perhaps, a comment on those powers that they are not even referred to in the guidance issued in 1998 on the management of illegal occupations.
  Derbyshire county council and South Derbyshire district council have attempted to meet the needs of those who choose a itinerant way of life. There is an 18-pitch site for long-term occupation at Foston and another eight pitches for short-term use at Lullington. The sites cause no local concerns and are well managed. Those using

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  them are well supported by education and social services, and a number of children attend local schools. Local taxpayers contribute £70,000 a year towards the running costs, and more than £100,000 has been spent on updating the sites over recent years.
  What, then, is the impact of the apparent abuse of an area's hospitality? First, there is the reality of the crime that stems from those occupations. Most cases involve forced entry and criminal damage. In one instance, a stolen lorry was located on site and seized by the police after resistance, including the throwing of bags of urine at officers. There have been reports of threatening behaviour to other legal users of the land. There was sufficient concern about potential public order offences to move a fair, which has historically used adjacent land at Church Gresley. I set aside the unproven claims that are often made of offences against neighbouring property.
  As important is the perception of crime. People regard the occupation of someone else's land by force as a crime. They would expect no support or sympathy from the law enforcement agencies if they chose to enter their neighbour's home or garden by force, threatened the owners and passers-by and left behind waste as they departed. They regard the authorities' apparent powerlessness as indicative of both double standards and weakness. They become angrier still when they find that they must fund the clearance and repair of a site. In a typical year, South Derbyshire district council pays out more than £5,000 for waste disposal from illegal sites.
  What should be done? First, we need consistency of police enforcement. That was described fully in the research report that accompanied the 1998 guidance on the subject. It is clear that some police authorities are prepared to use section 61 of the 1994 Act, while others are not. Although one must respect local determination of operational priorities, wide variations in practice cause problems. If one force chooses to use section 61 with vigour while another uses restraint, the word soon gets around, and travellers with ill intent are drawn to the more welcoming legal environment. There is already anecdotal evidence that that happens in Derbyshire, where the powers are seldom, if ever, used.
  Ms Julia Drown: Does my hon. Friend accept that, even when authorities use section 61, there is the problem that travellers who have caused a nuisance can just move down the road, creating a problem a little further on? Has consideration been given in his area to using order 113 through the High Court, which Swindon borough council uses? It allows the council to move travellers who have caused a nuisance out of all borough council-owned land.
  Mr. Todd: I thank my hon. Friend for her intervention. That particular order is not used in my area, but I shall deal later with the point about transfer to other sites.
  Secondly, the provision of legal sites needs to be recognised and encouraged. If a site is available, there should be an expectation and a legal obligation that it will be used. It should be possible for an authority to demand the removal of illegal occupiers to such a site while any necessary social investigations are conducted. Currently, investigations are required before a move is made. If an alternative legal site is available, I see no reason why the campers should not be moved to that site while
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  investigations are completed. If such a move is resisted, the persons involved should be deemed in contempt of court, with appropriate penalties.
  Thirdly, it should be possible to prevent illegal occupiers from simply moving to a neighbouring site following a court order. That has happened frequently in south Derbyshire, with one group moving several times in Foston to alternative sites, once possession had been granted on the one that they were occupying.
  Fourthly, it should be possible to prevent any illegal occupation of a site once possession has been granted, rather than merely preventing occupation by those against whom the order has been physically served. A major problem is the later arrival on site of others who have not had an order served on them but who are then required to face an order, delaying their eventual removal. Latecomers drawn to the site should be covered by the same order.
  Finally, ways should be explored that would allow recovery of the costs of repair and waste disposal from those responsible. It has been suggested—the guidance notes suggest this—that skips and toilets be provided at public expense for illegal occupiers. Does that not give legitimacy to what they do? I hesitate to suggest on-the-spot fines, and anyway cash machines are scarce in my area, but I cannot believe that it is beyond our art to devise mechanisms that offer a genuine and realistic threat of cost recovery from those involved.
  The taxpayers whom I represent are happy to offer hospitality to travellers, substantially at local taxpayers' expense, but a right to choose that way of life carries an obligation to behave in a way that meets other people's reasonable norms. We also expect consistency from the police and appropriate action when the law appears to be being broken. If those expectations are not met, that willingness to offer facilities at local cost is threatened. It is hard to see how one can sustain that commitment if there appears to be no local advantage in the provision of such sites. More importantly, respect for law enforcement agencies is also jeopardised.
  I hope that the Minister, in his response, will set out how the Government can meet the concerns that I have expressed on behalf of many residents of South Derbyshire who are frustrated by the current position.
  7.12 pm
  The Minister of State, Home Office (Mr. Charles Clarke): I sincerely congratulate my hon. Friend the Member for South Derbyshire (Mr. Todd) on securing this important debate on a matter which, as I think he knows, affects not only South Derbyshire, but many other parts of the country, and on the powerful way in which he put his case.
  The Government are fully aware of the misery that can be caused by some travellers, particularly on unauthorised sites. Home Office Ministers receive a steady stream of complaints about unauthorised traveller sites from hon. Members and members of the public.
  Key problems include criminal damage to bollards, fences, gates and so on, to gain access to land; a rise in crime and disorder in the vicinity of some camps; and mess and litter left on sites which must be cleaned up by landowners or local authorities. My hon. Friend identified a number of other specific aspects which, as I say, I regret are not particular to South Derbyshire, but occur in too many places throughout the country.

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  It is wholly wrong that any criminal activity should be tolerated in respect of travellers. The law should be enforced as with all other sections of the community. It is for the police to ensure that any offences are properly investigated and that the law is enforced.
  I come to my hon. Friend's first point in relation to his concern that the police in Derbyshire are not using their powers under section 61 of the Criminal Justice and Public Order Act 1994 to remove trespassers from unauthorised sites, and that there is an inconsistency in police enforcement of those powers in different force areas. My hon. Friend the Member for South Swindon (Ms Drown) reinforced that point in her intervention.
  Section 61 gives the police the power to remove people who are trespassing with intent to take up residence and who have been asked to leave by the landowner. That is a serious power which can be used when certain conditions are met. They are that trespassers have more than six vehicles on the land, or have caused damage or used threatening, abusive or insulting behaviour towards the landowner or person acting for him or her. Both police and local authority powers to direct trespassers to leave land under the Criminal Justice and Public Order Act are, as my hon. Friend said, discretionary.
  Ministers cannot tell the police how to go about enforcing the law in any particular case, for reasons that the House will understand. It is a matter for the operational judgment of individual chief constables. Even though these powers are discretionary, the Association of Chief Police Officers takes the view that as police officers are responsible for public order and the prevention and detection of crime, it is mainly in these circumstances that the use of the powers should be considered.
  On that basis, ACPO issued revised operational guidelines on the police use of these powers in April 1999. It is hoped that this will eventually make for a more consistent approach between and within police force areas. It is clear that police powers may be used at an early stage where necessary when problems of crime, disorder or serious disruption to the community are associated with unlawful encampments.
  However, my right hon. Friend the Home Secretary recognises that we do not have completely satisfactory arrangements in place for dealing with the problems caused by unauthorised encampments, particularly where they cause disorder or other problems for local residents or landowners. My right hon. Friend is giving this matter his personal attention and expects shortly to be able to announce changes, which we hope will be widely welcomed throughout the country, including by my hon. Friend's constituents, who have borne the brunt of the problems caused by unauthorised encampments. As I have said, my right hon. Friend is personally actively involved in discussions with the Department of the Environment, Transport and the Regions to reach a position where we can make announcements that I hope my hon. Friend will find satisfactory.
  My hon. Friend queries why section 59(8) of the Environmental Protection Act 1990, which is reserved for fly tipping, is seldom used against travellers on unauthorised encampments. There are a range of stringent controls in place to ensure that waste is managed safely, and is recovered or disposed of without harming the
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  environment or human health. The main controls are set out in part II of the 1990 Act, and fulfil our obligations under the amended European Community framework directive on waste. The Environment Agency is responsible for the enforcement of most of these controls.
  Under section 33 of the 1990 Act, it is unlawful to deposit, recover or dispose of waste without a waste management licence, contrary to the conditions of a licence exemption or in a way that causes pollution of the environment or harm to human health. The consequences for anyone contravening these controls are potentially very serious.
  Unfortunately, waste is sometimes fly-tipped. Where this happens, it is clearly essential that steps are taken to reduce or eliminate the risk of environmental pollution or harm to human health, and to ensure that fly-tipped waste is disposed of safely and properly. Section 59 of the 1990 Act provides the Environment Agency and local authorities, in their role as waste collection authorities, with the means to do so. The section provides that where waste has been deposited illegally, the Environment Agency or a local authority may serve a notice requiring the occupier of the land to remove, eliminate or reduce the consequences of the deposit. However, a person on whom a notice is served has a right of appeal to a magistrates court. Where an appeal is made, the court must quash the requirement imposed by the notice if it is satisfied that the appellant neither deposited nor knowingly caused or permitted the deposit of the waste.
  Under section 59, the Environment Agency or local authority may themselves take steps to remove fly-tipped waste where the occupier fails to comply with the notice or there is no occupier of the land, or the occupier neither made nor knowingly caused or permitted the deposit, or there is imminent danger of pollution of the environment or harm to human health.
  Mr. Todd: Does my hon. Friend accept that mere occupation of the site and allowing waste to be tipped there, regardless of who on the site commits that act, would be an offence on the basis that that is permitting the depositing of waste?
  Mr. Clarke: I accept the substance of my hon. Friend's point. I am not prepared to venture into a legal statement on whether he is right or wrong in the technicality that he has set out. I was about to conclude this part of my remarks by saying that the Environment Agency or a local authority is entitled to recover the costs incurred in exercising these powers from any person who made or knowingly caused or permitted the deposit of any of the waste. That precise point is being addressed in current discussions between the Home Office and the Department of the Environment, Transport and the Regions. My hon. Friend was right to make the point, but I have learned to take great care before offering opinions about what the law says or does not say on specific points.
  My hon. Friend also suggested that there should be powers to prevent travellers who have been evicted from one site from staying at another site further down the road, and to prevent them from occupying land that has been repossessed from another group of travellers. We believe that the standards of behaviour expected of travellers should be the same as those expected of the settled community. Problems that arise from any way of life and

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  affect the rights and freedom of others should be treated in the same way. Local authorities and the police have adequate powers to deal with matters through the methods that I have outlined.
  To place land out of bounds to all unauthorised campers would effectively make unauthorised camping an immediate offence. It would be dangerous and possibly iniquitous to do that, especially as local authorities no longer have a duty to provide accommodation for gypsy caravans. We believe that it is essential, in the interests of natural justice, to retain the requirement for a court order before eviction can take place. We have no plans to remove the requirement for local authorities to obtain a court order.
  Gypsies may have a genuine reason, for example a medical emergency, for camping on unauthorised sites. If that is the case, it is right that they should have the opportunity to present a defence to the court against an eviction order. To remove the necessity for a court order and the opportunity for a camper to present a defence could create a culture of immediate forced eviction by local authorities without due consideration of all the issues.
  Ms Drown: Does my hon. Friend agree that, if travellers were causing a nuisance which had been proved in court, and provided that there was a designated site to which the travellers could move on, it would be reasonable to say that they should either move off borough council-owned land or move on to the designated site? Otherwise, we may have the problem that I experience in my constituency: residents simply do not understand why the council cannot stop travellers who cause a nuisance from moving down the road.
  Mr. Clarke: My hon. Friend's judgment is correct. She makes a similar point to that of my hon. Friend the Member for South Derbyshire. I was trying to explain that implementing the course of action that he suggested is difficult and has some serious human rights implications, with which we are wrestling.
  Immediate eviction would also make it impossible for local authorities to follow the advice in Department of the Environment circular 18/94, which states that local authorities should take account of the duties they may owe to campers. The Human Rights Act 1998, which comes into force in October, will also make it easier for people to challenge violations of their rights under the European convention on human rights.
  My hon. Friends the Members for South Swindon and for South Derbyshire make a powerful point, and I shall carefully consider ways in which to expedite the procedures to deal with the problem. As with so many aspects of the law, one of the difficulties is squaring rights, which are important, with the time taken to resolve a problem. In principle, there is no reason why a rapid resolution would not go some way to tackling my hon. Friends' anxieties.
  Mr. Todd: Will my hon. Friend consider whether the rights of travellers in the position that he outlines might be as adequately protected on a designated, legitimate site provided by the local authority, and that pointing out the availability of pitches on legitimate sites would be a
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  reasonable basis for demanding their immediate removal from the site that they were occupying while their social circumstances were reviewed?
  Mr. Clarke: There is a powerful case for that. In his original speech, my hon. Friend made points that were worth considering about the procedures and the times at which some matters are assessed. I am happy to consider them very carefully.
  There is a great difficulty, about which I think I should be frank. I refer to a conflict between the rights of individuals to which our whole society subscribes, when criminality or similar issues are not involved, and the rights of surrounding communities. Those are precisely the issues that my right hon. Friend the Home Secretary is currently discussing with colleagues in the Department of the Environment, Transport and the Regions, with the aim of finding a solution.
  Our fundamental point of principle is that travellers have a right to live their lives as they do, freely and in an entirely acceptable way. By the same token, however, criminal or anti-social behaviour on the part of any section of the community should be treated equally, across all communities. I think that most Members on both sides of the House accept both those principles; certainly, Labour Members do. The question is how to make them work in practice. The complaints that we receive so frequently—complaints cited articulately by my hon. Friend—concern circumstances in which those two rights have not been married satisfactorily. Our current discussions seek to deal with that.
  My hon. Friend said that the provision of legal sites generally needed to be encouraged. I support that approach, for reasons connected with one of the rights to which I have referred. I am pleased to note that there is local authority site provision in South Derbyshire, and I am glad that the local authority takes its responsibilities seriously. That is, of course, what local authorities are advised to do by the Government. Site provision is an important element of the managing of unauthorised camping, for the reasons given by my hon. Friend.
  Circular 1/94, "Gypsy Sites and Planning", places gypsies on the same footing as others in relation to the planning system, while seeking to recognise their special needs. It applies to local authority and private gypsy sites, and advises local planning authorities to assess the need for gypsy accommodation in their areas and, wherever possible, to identify in their plans locations suitable for sites. When that is not possible, they should set out clear, realistic criteria for suitable locations as a basis for site provision policies.
  The emphasis in circular 1/94 is on identifying suitable locations for sites. The Department encourages local authorities to discuss the preparation or revision of the plans with all concerned, including travellers themselves, their representative bodies and local support groups. We also think that representatives of travellers should consult local authorities on planning matters before buying land on which they camp for which planning permission would be required. The Department is commissioning separate research on the management and condition of existing local authority sites, which will inform future policy development.
  We strongly agree with my hon. Friend's approach. As I said earlier, my right hon. Friend the Home Secretary, my Department and the Department of the Environment,

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  Transport and the Regions are actively reviewing the joint Home Office-DETR good practice guidance. The document was first published in October 1998, and advises that local authorities should have an overall strategy. The strategy should include needs assessment and site provision, as well as eviction policies, which should be developed with the local police force.
  The aim of the joint guidance is to encourage a balanced approach to managing unauthorised camping. It is necessary to balance the nuisance that can be caused to members of the local community with the rights of campers. As I have said, research commissioned by the DETR and the Home Office is under way, with the aim of reviewing the good practice guidance on unauthorised camping. The aim is to establish the extent to which the guidance is being followed, how well it is working and whether there are any gaps that we need to address. The final report on the management of local authority sites is due in September, and will give us a basis on which to make future policy decisions.
  Let me summarise our central approach. We believe that the police operational guidelines were strengthened and clarified by the Association of Chief Police Officers last year, following meetings with Ministers. They make it clear that police powers should be used primarily when there are problems of crime, disorder or disruption to the local community associated with unauthorised encampments.
  Ministers have made it clear that police powers can be used at an early stage when necessary. I emphasise above everything that joint Home Office-DETR guidance encourages a multi-agency approach to dealing with
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  problems caused by unauthorised camping. As with many areas of policy, it seems critical that we have a genuine partnership approach that determines how we operate. A partnership approach on the basis of clear guidance and guidelines, both from the Home Office and the DETR and from the Association of Chief Police Officers, will give us a basis on which to develop policy.
  As I have said, my right hon. Friend the Home Secretary is considering joint guidance and whether any changes are needed. It must be made clear—I have sought to do so in the debate—that toleration of encampments does not stretch to toleration of crime, disorder or disruption to the local community. As I have said, he hopes to make an announcement shortly on those matters.
  We have no evidence to suggest that police powers are currently used in a discriminatory way. We are aware of the problem of welfare inquiries that must be made by local authorities, fulfilling their statutory obligations, before taking eviction action. We are willing to consider whether any changes are necessary. Although the provision of sites is primarily a matter for the DETR, we acknowledge my hon. Friend's approach towards the important responsibilities that must be fulfilled and his efforts to move the matter forward.
  It is a vexed and difficult problem. I am delighted that my hon. Friend has secured time to debate it. I hope that I have been able to offer at least some reassurance to my hon. Friends who have spoken that we take the matter seriously. We address it as a matter of urgency and concern.
  Question put and agreed to.
  Adjourned accordingly at twenty-nine minutes to Eight o'clock.

Preamble
[MR. MICHAEL J. MARTIN in the Chair]

Community Legal Service
Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Betts.]
2.30 pm
The Parliamentary Secretary, Lord Chancellor's Department (Mr. David Lock): I welcome the opportunity to debate the Community Legal Service. Its development is a manifesto commitment and the Government's flagship policy for reforming civil justice. The creation of the service is a radical programme, which will transform access to justice, make it easier for people to understand their rights and responsibilities, and enable them to resolve disputes, enforce their rights and, if necessary, seek the protection of the courts.
Traditionally, the legal world conjures up images of court rooms with judges and barristers in wigs, but that is only the tip of the legal iceberg. The vast majority of community legal work is unseen by members of the public and operates away from courts and often away from formally qualified lawyers. The CLS challenges the public perception of legal services. We are redefining the concept to make them relevant and important to all of us who take responsibility for the welfare of those whom we represent. This wider, more inclusive view of legal services in the CLS covers the full range of different levels and types of help, whether provided by public libraries which provide people with information about their legal rights and responsibilities, local advice centres which help people with debt problems and benefit claims, advisers doing casework on behalf of clients with immigration or employment problems, or lawyers who advise and represent people in court, at tribunals and in any other areas where legal rights are concerned.
Those providing legal services are not restricted to solicitors and barristers in private practice. They include professionals who work in the not-for-profit sector, advice workers, local authorities, including trading standards officers, and trained volunteers in advice agencies such as citizens advice bureaux, who do such valuable work throughout the country and work so closely with many hon. Members. All are part of the CLS and help the public to have better access to good quality advice on their rights and duties. It is no good people having rights in theory if they do not know what they are, how to exercise them or who to turn to for advice. Without that information, legal rights are merely illusory.
Some, including the president of the Law Society, have asked why we need the CLS. The answer is that, despite the efforts of many professionals and volunteers, in reality too many people are unable to access necessary legal services or obtain necessary legal advice.
A few areas of the country benefit from a range of good quality advisers, who form ad hoc networks to refer people to the right sort of advice and provide a
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better service to the public. However, that is the exception and too many areas are advice deserts or advice mazes through which those in need of help struggle to find the right adviser. That situation has arisen because of the fragmentation and lack of coordination in the funding of legal advice. For anyone who suggests that there are no problems, the research paper, "Paths to Justice", which was produced by Professor Hazel Genn and the National Centre for Social Research, is suitable bedtime reading. Professor Genn's paper is the most comprehensive survey ever of the experiences of people with problems that could ultimately end up in the civil courts. It does not make easy reading for lawyers or anyone who wants to defend the present situation.
The old civil legal aid scheme had to change because of several problems. Expenditure on civil legal aid was increasing year on year, while the number of people being helped was not. There was no way of targeting expenditure on the areas of greatest need, and no connection was made between legal aid expenditure and other funders' spending on legal and advice services. Lawyers had no incentive to provide services cost effectively or to provide the services that people really needed. Anxiety was increasingly expressed that too many weak and unmeritorious cases were receiving funding. However, it is not merely a question of money. Significant amounts of public money are already spent on legal services. About £150 million of local authority money is spent on purchasing legal services each year. Through the Legal Aid Board, the Government spent, in net terms, £780 million on civil legal aid last year, including £206 million on civil advice and assistance. This year, that figure will increase to £226 million.
Funding is also provided by other central Government Departments, charitable foundations and through the valuable contribution of the National Lottery Charities Board. A great deal of money has, therefore, been committed to ensuring that people have access to legal services. Civil legal aid spending has increased vastly over the past six years. How, therefore, have we ended up with advice deserts and advice mazes? The answer is that all those different funders have been acting in isolation, and sometimes even at cross purposes.
As a result of that failure to work together, a single funder has only a limited overview of an area's legal needs, and no consistent or comprehensive quality standard can be relied on in deciding whom to fund. As one local authority funder said,
It's like doing a jigsaw puzzle with half the pieces missing.
In the past, the largest single funder of legal services, the Legal Aid Board, did not even have a jigsaw. Under the system that Opposition Members support, the Legal Aid Board simply acted as a cheque payer on demand, rather than as a purchaser of services that decided where there was unmet legal need, which services should be funded and how to use taxpayers' money to best effect.
Those are major, long-standing problems, which the previous Government ducked. They responded by cutting the number of people eligible for legal aid while doing nothing to tackle the fundamental problems—classic short-termism, year after year.
Throughout consideration and implementation of the Access to Justice Act 1999 the Opposition whinged and made personal attacks, but proposed no coherent

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alternative polices. I accept that they do not like the CLS. They have railed against it so often that I do not expect a Pauline-like conversion today. However, I hope that the Opposition will use today's debate as an opportunity to come clean with alternatives.
We know that the Opposition want to abandon full-cost recovery and transfer £300 million from court fees to general taxation. Do they also propose to revert to a demand-led legal aid budget? If so, would they put up taxes or cut other services in order to increase payments to lawyers? I hope that the single Opposition Member present today will show us whether there is any legal thinking on their side of the political divide. Do they have a policy or is this a Tory policy void? I refer the hon. Member for Surrey Heath (Mr. Hawkins) to "Macbeth". It is a case of
full of sound and fury,
Signifying nothing.
I draw his attention to the first part of that quotation.
The Lord Chancellor launched the CLS in April this year. The launch marked the replacement of the existing civil and family legal aid budget with the CLS fund, and the implementation of three core policies for the CLS. Those policies are, first, CLS partnerships, which will take responsibility for planning local legal services; secondly, the CLS quality mark, which will be awarded to providers of legal services that achieve the required quality standards; and thirdly, the CLS website, called "Just Ask!", which contains a directory of legal services and guides users to the most appropriate sources of information and advice on more than 300 other sites.
CLS partnerships are at the heart of the community legal service. Each partnership includes the two players common to every area: the Legal Services Commission, which from April succeeded the Legal Aid Board, and the local authority. Working with other local funders and providers of legal services, they will support the creation of local referral networks of good quality services. CLS partnerships have four main tasks: to assess the extent of need in their area for legal and advice services and to prioritise those services; to identify how well the current supply meets the need in priority areas; to plan together how best to organise the funding that each partner brings to the table so as more effectively to meet priority legal needs; and to facilitate the creation of active referral systems in the local network of services.
The term "partnership" is not used lightly. The CLS does not involve a pooling of funds. Each funder—the Legal Services Commission, the local authority and the National Lottery Charities Board—will maintain its independence, distinctive approach and discrete responsibilities. The partners come together to gain the benefits of pooling expertise and knowledge so as to engage in activities that are of mutual interest and concern. By working together in that way, they are in a better position to share information, to understand what is needed in a particular area and to target individual decisions to achieve objectives. That process will be underpinned by concordats which will promote confidence and encourage trust between independent partners working together to deliver common objectives.
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Before we hear special pleading on behalf of lawyers, I remind hon. Members that the sort of prioritising decisions the partnerships will have to make are precisely the sort that all public authorities providing services from large but, none the less, controlled budgets must make. How, for example, does a health authority balance health promotion and heart surgery? Those are tough decisions, and the views of local partnerships will be similarly vital in deciding how public money is spent on legal services.
The Legal Services Commission is able to participate fully in local partnerships because of the radical changes to legal aid made in the Access to Justice Act 1999. The previous civil and family legal aid scheme has been replaced by the CLS fund. Instead of the previous demand-led system, the CLS fund will enable us for the first time to target money on national and local priorities by awarding contracts to the providers best placed to deliver a quality service that meets local priority needs and is purchased in a best-value context. Contracts have been issued from the start of this year to providers throughout England and Wales.
A key difference is that, under the new CLS, funding is now allocated on the basis of priorities that have been decided locally and, at national level, by the Lord Chancellor. They include the welfare of children, domestic violence and helping people avoid or climb out of social exclusion. Those priorities are given effect by the introduction of contracts. By April 2001, all civil and family legal services will be provided by quality-assured suppliers that are under contract with the Legal Services Commission. The contracts enable the commission to choose what services it wants to provide and ensure that taxpayers' money is directed at the areas of greatest need. They also provide suppliers with an incentive to provide services cost effectively.
Another key difference between the CLS fund and the previous legal aid scheme is that the new fund replaces the old civil merits test with a new funding code. The funding code gives effect to identified priorities in terms of deciding which cases receive funding by setting more or less stringent tests according to the priority of the category of case.
Although the CLS is still at a very early stage, there have already been encouraging signs. There are now 109 CLS partnerships, which involve 184 local authorities and cover 50 per cent. of the population of England and Wales. We have, therefore, exceeded the Lord Chancellor's target of covering 33 per cent. of the population by autumn 2000, and are well on the way to achieving the targets of 66 per cent. by spring 2001 and 90 per cent. by spring 2002.
The CLS partnerships are delivering where it matters in the communities in which they serve. For example, the CLS partnership in Northumberland is involved in the local action against poverty initiative. It provides debt advice workers in general practitioners' surgeries and primary health care teams throughout the county, enabling health workers to refer on those in need of debt advice.
In the East Riding of Yorkshire, the Legal Services Commission and the local council are running a pilot scheme to improve access to services by providing advice kiosks at locations throughout the county, which will link with the local council's customer services

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centres. That highly impressive scheme was developed specifically to use information technology to overcome the problems associated with that type of rural area. We will be monitoring the pilot scheme closely to see whether it should be adopted elsewhere.
There are now over 5,500 solicitors and advice agencies with the CLS quality mark, and an increasing number of organisations are applying every month. I especially praise the involvement of the National Association of Citizens Advice Bureaux, which is fully engaged in working with us and will become the first external organisation to be accredited to award the CLS quality mark.
The CLS website, "Just Ask!", has already proved a winner. It has won a major award and attracts an average of more than 1,000 users every day and sometimes more than 2,000. We anticipate that the figure will increase steadily over the coming months, particularly as the design of the website is further enhanced.
Mr. David Drew: If I may, I shall talk about my own experiences in Stroud with the local citizens advice bureau. Debt counselling was clearly identified as a priority and I would support that because a large number of people go to citizens advice bureaux for advice on that. However, there is also a clear need for housing and employment advice. The problem that needs to be considered is how to achieve the second level of prioritisation through the franchising. Will my hon. Friend say whether there may be a revisiting of the priorities in due course?
Mr. Lock: I am grateful to my hon. Friend for that helpful intervention. The priorities are being kept under review, and the fact that categories such as children's cases or domestic violence are not of the highest priority does not mean that we are not providing extensive funding for them. Housing, employment and immigration funding is being substantially increased as part of the extension this year from £206 million to £226 million for contracts for legal help. I am sure that suitable priorities will be identified in my hon. Friend's constituency, and I would be delighted if he wrote to me about any specific problems that he would like me to consider.
As long ago as 1968, the Society of Labour Lawyers wrote an influential pamphlet about the need to develop community legal services. That remained unfinished business for many years, but this Government have turned the ideas into substance and created the framework in which community legal services can be genuinely delivered for the first time.
I hope that the CLS will receive a warm welcome in all parts of the House, because those services will be delivered in all constituencies. I look forward to hearing about the needs and experiences of individual hon. Member's constituencies.
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Mr. Nick Hawkins: The Parliamentary Secretary, Lord Chancellor's Department, the hon. Member for Wyre Forest (Mr. Lock), is developing something of a reputation for trying to get his retaliation in first, and today appears to
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be no exception. Before addressing his specific points, I shall respond to his final statement, in which he said that he looked forward to hearing hon. Members talk about experiences in their own constituencies.
I shall start with an account from the sharp end, which is not the sort of thing to be found in the official Government brief that the Parliamentary Secretary has just read out, with its slogans and buzz words about sustainable legal services and solutions to social problems. I shall talk about reality, about what is happening on the ground, focusing on a particular firm of solicitors in my area. The firm is not based in my constituency, although it has many clients there; it covers a wide area and has several offices.
One of the partners, who is also an associate of the Institute of Chartered Secretaries and Administrators, writes:
We have a mix of both Private and Publicly Funded Clients. Our Private Client rates have risen over the years to take account of the cost of practising, the rising costs of the overheads which we have to bear, including the rising staff costs which we have to pay.
Publicly Funded work has increasingly become more uneconomic. Our Accountants have advised us to restrict the amount of Publicly Funded work which we do within the general mix of our practice. Our Accountants have gone further and suggest that we should cease doing Publicly Funded work at all, because it is doubtful that we can do this work at a profit…there has been no increase in the rates of Publicly Funded work in the areas in which we practise for nearly eight years…it is unfair for Legal Aid rates to have been frozen for such a long period of time given the general increases in overheads which we have had to absorb.
In truth the absorption of these overheads has been only possible by a conscious effort being made by the Partners of this Firm to increase the volumes of Privately Funded work whilst not seeking to increase the volumes of Publicly Funded work.
He states that the firm's office in the constituency of my hon. Friend the Member for Woking (Mr. Malins)
found it uneconomic to continue with a Criminal Law Department and the Woking office no longer carries out any criminal work.
As the Parliamentary Secretary knows, such work is one of the most vital aspects of service to the community.
Although we did not overlap, the Parliamentary Secretary and I were in the same west midlands chambers, which undertook a lot of criminal work. When I hear him read out a departmental brief that refers to bleats from lawyers, I start to believe that he has undergone a transformation—that he has ceased to be a lawyer. Perhaps some of the firms that instructed him when he was in chambers might agree. Despite the hon. Gentleman's comments, we must be conscious of the effect of the Government's plans on lawyers working at the sharp end. The example that I have given reinforces the view that the official Opposition have expressed repeatedly: that the so-called Access to Justice Act 1999—probably the worst misnomer of any piece of legislation introduced by the current Government—has become known, not only among Opposition Members, but generally in the profession, as the denial of justice act.
The letter to which I have referred also states:
unless the whole system is properly resourced then there will be insufficient quality legal advice available.

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That is the reality. It continues:
To attain a Legal Aid Franchise and subsequently a Contract for Advice and Assistance, this Firm had to make a substantial investment in systems to give the Government the quality assurance it required. This has substantially increased the administrative burden and this Firm's overheads in order to demonstrate that this Firm is able to deliver the quality legal advice demanded by the Government. However, in return, there has been almost no recognition in terms of remuneration rates.
By seeking Franchise status and by taking a Contract, we wish to demonstrate our commitment to providing Advice and Assistance through the Community Legal Service. The problem, however, is that as a business we must make a profit. I sure that you will appreciate that any firm in a commercial environment which identifies an area of work which is unprofitable will be well advised to cease doing that work as to continue doing unprofitable work can only lead to the failure of the firm.
That is what will happen. Firms will either carry on doing such work and go out of business—which will not enhance the service to the public—or they will not do it. The Opposition, the Bar Council and the Law Society have warned the Government of that many times. They have got it wrong.
Mr. Lock: The hon. Gentleman cites with approval a statement that the current CLS budget of £1,600 million a year is not properly resourced. What are his resourcing proposals for that budget? How much would he increase it by?
Mr. Hawkins: The much-vaunted plans for the CLS that the Government introduced are not working. The Parliamentary Secretary will hear exactly what our proposals are in due course, when the time comes, as and when we have policies to put to the electorate, but today we are discussing what the Government are doing. This is their debate, not an Opposition-led debate. We are here to respond to the Government's—and the Parliamentary Secretary's—outrageous boasts that they are doing all the right things and that everything is working. I have cited a concrete example given in a letter that was written on behalf of many people. It is not the only letter that I have received on the matter; it just happens to be the best one and it is from a firm in my constituency. I am responding to the hon. Gentleman's challenge—he wanted to hear what was happening at the sharp end; well, the answer is that his plans are not working. He can smirk all he likes, but he will find that, along with the current chorus of disapproval will be heard a chorus of protest.
The letter goes on:
Many firms have chosen not to continue providing Publicly Funded services. This Firm is now at a point in its development where that decision may have to be taken.
Whilst we have Contracts in certain areas of law, we also provide a significant service to the community under the "Tolerance Provisions". We are currently considering whether we can continue to provide the broad spectrum of advice which historically has been given to Clients in our community. We are able to withdraw from that area of advice immediately. If remuneration rates do not improve over the longer term, then our existing Contracts for Family and Crime, may also not be renewed.
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The public perception is—
this has been said repeatedly by both the Lord Chancellor and his Ministers—
that Solicitors are "fat cats". This is not an accurate description of Solicitors doing Publicly Funded work and if there is to remain a network of Publicly Funded lawyers, then the unfairness…needs to be recognised and remedied. I would, therefore, urge you to take the Lord Chancellor to task over this issue… Surely the basic requirement must be that it should be properly funded.
That is the response to the Government's much-vaunted policy: firms will either choose to stop offering the service or they will go out of business.
Despite such warnings, the Parliamentary Secretary says that the policy is a success. He believes that the problem is nothing other than lawyers' whinges. The Government do not recognise reality. I sometimes think that those in the Lord Chancellor's Department live in a dream world of their own, where everything is in line with the Government's press releases. Well, that is not the reality, and the Parliamentary Secretary and his colleagues must wake up to what is really gong in.
I shall now deal with the more general points that have been made by the Law Society, which is not just an individual firm, but the official organisation that represents solicitors throughout the country. It has a number of concerns about the partnerships. It states:
It is unclear how those local authorities who have historically had no interest in advice provision will be encouraged to set up Partnerships. This is important given that their reluctance to do so could lead to patchy provision around the country.
It is intended that there will be strong encouragement to local authorities to take the lead in setting up local Partnerships through the relationship with Best Value. We believe that the link with Best Value will be helpful in encouraging participation, but there is no way of compelling local authorities to fund legal services even where needs and priorities have been identified.
That is an important point to which I shall return because, once again, I have a local example of shocking attempts by the Lord Chancellor's Department to hold local authorities to ransom.
The Law Society points out that
the Partnerships will be led by funders of services—local authorities and the Commission. This could lead to conflict of interest when planning and funding decisions are taken. Many providers of legal services bring actions against the authorities that will be funding and planning services, and we believe that this may impact on the funding and planning decisions made.
That stands to reason: the Law Society must be right about that. It goes on:
We believe that the tasks that the Partnerships are expected to undertake are both complex and resource intensive particularly in assessing need and planning provision. This will have serious implications for the main funding partners involved in the Partnerships as well as for providers and other groups involved in the Partnerships.
Needs assessment is difficult and expensive. The Legal Aid Board, as it then was, estimated that its 13 Regional Legal Services Committees [RLSCs] cost £900,000 in their first year of operation.
The Law Society says that it has been made very clear that there will be no new money available for the establishment of the CLS. That will have implications for the partnerships. In addition, no analysis appears to have been made of the cost, as mentioned in research carried out by Richard Moorhead into the pioneer partnerships set up by the Government. Paragraph 2.41 of the research points out that there are significant resource implications, especially for lead partners, but

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also for others, in terms of investing time, supporting meetings and consultations, and drawing other resources into a partnership. The research also states that it was clear that the more in-depth work on needs assessment and user involvement required significant resources. The Law Society believes that that will be a major factor in determining the ability of the partnerships to carry out the majority of their key tasks.
I said that I would refer to some of the specific points made by the Minister. He quoted Shakespeare, but listening to him and having heard the arguments from him and his fellow Ministers so often called another literary figure to my mind. In this area of the law, the Government appear to believe a dictum of one of Lewis Carroll's characters, which is
What I tell you three times is true.
However, what they tell us is not true. I shall give a local example of how the Lord Chancellor's Department treats local authorities.
The Government, including the Treasury and the Lord Chancellor's Department, claim that local authority spending is discretionary, and they tell local authorities that what they spend money on is up to them. However, let us consider a practical example. A chief executive of one of the two borough councils in my constituency received a letter, signed in the Parliamentary Secretary's name on his behalf, which stated that there was no statutory duty on citizens advice bureaux in respect of the CLS, and no compulsion to participate in the CLS network. The chief executive responded to the letter as follows:
on reading through the remainder of your letter it is clear that it is the Government's intention that all Citizens Advice Bureaux should be included in local networks. Furthermore, in correspondence with the Department of Trade and Industry they confirm that there will be costs falling to local CABs, at whatever level, in order that they might meet their compliance criteria for the CLS Quality Mark.
Given that local Citizens Advice Bureaux offices are invariably funded almost entirely by the local authority to say that there are no new demands being required of local authority budgets is, I believe, disingenuous.
The chief executive is right: the Government have almost won awards for disingenuousness in many of their policies. He continues:
This view is further supported in the sixth paragraph of your letter, where you refer to the two principal funders of legal services being the Legal Services Commission and local authorities. It is clear from this statement that you intend local authorities to commit more money in order to effect this new initiative, albeit that the Government, as always, is making no further money available to local authorities in support thereof.
There we have it—the poor local authorities are over a barrel. The Government tell them that a wonderful service, the CLS, has been introduced, but that they have to fund it in addition to having to fund citizens advice bureaux. Local authorities are caught between the devil and the deep blue sea: the Government will not provide any extra money to enable them to take on extra commitments. The Government are keen on announcing new initiatives while expecting someone else to pay for and deliver them. The example I have given is yet another illustration of the Government's control freak tendency. They want to centralise everything and to introduce amazing bureaucracy, but they are not the ones who have to work at the sharp end.
Mr. Lock: The problem that the hon. Gentleman seeks to illustrate is founded on the assumption that local authorities are compelled to take part in partnerships, but they are not—doing so is entirely voluntary. Has the chief executive in question contacted the Local Government Association, with which the policies were developed? The Lord Chancellor's Department received warm praise from the LGA for proposing local initiatives that are developed and delivered locally, not centrally. Surely the LGA knows what it is talking about, even if the hon. Gentleman does not.
Mr. Hawkins: In fact, the chief executive approached both the Department responsible for these policies—in other words, the Lord Chancellor's Department—and the Parliamentary Secretary personally. In his reply, the hon. Gentleman did not advance the argument that he has advanced this afternoon—but I shall let that pass. In any case, a local authority might suspect that it would not get unbiased opinions from an association led by supporters of the Government.
The chief executive's letter states that it is
the view of this Council that the Legal Aid system is a national system and, as such, should be funded entirely by the Government: it does not therefore recognise your statement that a local authority such as Surrey Heath Borough Council is a principal funder of legal services. Clearly this Council employs legal staff to deal with its own legal matters, but it has never—and may I say has no intention of so doing—considered the implementation of a public legal advice service, and, to my knowledge, I do not believe that any previous government administration ever envisaged that it should be incumbent on local authorities to provide such a service.
The proposals have been put to a local authority without any extra money being provided to that authority—or to any other—to implement them. The letter goes on to say:
I have yet to hear from the Regional and Planning Partnership Manager with regard to the possibility of partnerships within the region.
I understand that that is still the case. The chief executive wrote to the Minister on 14 June and has yet to receive a reply. Perhaps that is because the points he made were so unanswerable that no answer could be given.
Before I conclude, I apologise to you, Madam Deputy Speaker, and to the Parliamentary Secretary, for the fact that I might not be able to stay for the entire debate, although I hope to be here for most of it. I am sure that other Conservative Members whom I expect to join us later will have the opportunity to participate later in the debate.
I turn finally to the aspect of the Parliamentary Secretary's letter—it does not have his signature on it, but I assume that he must have authorised someone in his office to sign it in his name—that added insult to injury. The chief executive was outraged by the fact that it said that I—as Member of Parliament for that local authority area and for part of another local authority area—was the shadow Minister and suggested that the chief executive consult me for an explanation of the Government's policy. It is not incumbent on chief executives of local authorities to consult any Member of Parliament—they deal directly with Government Departments.

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For the Parliamentary Secretary to attempt to score that kind of cheap political point in an official letter to the chief executive of a local authority is as unworthy of him as it would be of any Minister. It reveals the Government's bankruptcy of ideas. Their policies are in a mess—the professional organisations say so; they are not properly funded, and they will be a disaster.
3.8 pm
Mr. Keith Darvill: Before commencing, I declare an interest as a practising solicitor in a firm of solicitors that participates in a local CLS partnership.
I welcome this debate. I supported the Second Reading of the Access to Justice Bill and was a member of the Standing Committee that considered it prior to its receiving Royal Assent last year. The legislation contained some difficult and tough measures, which were not popular. My view at the time and now is that the fact that the development of the CLS goes some way towards meeting the needs of vulnerable people in society compensates for the sacrifices made, especially in the provision of legal aid. Time will tell whether that judgment is correct.
We are at an important stage in the development of the CLS. It was launched in April this year with the aim of having the network of partnerships up and running in almost every area of England and Wales by the end of March 2002. That is a tough, but achievable, aim. In its recent report "The community legal service: access for all?" the Consumers Association said:
The community legal service is one of the most important Government reforms of recent times. The stated aim of the reform—to help the most vulnerable in society—is a noble one, but the price of failure is great. The success or failure of these reforms will affect the ability of millions of the most vulnerable people in society to enforce and protect their rights.
The Consumers Association goes on to say that the CLS reforms will work only if major resources are committed to them. I broadly agree with that view.
The legal aid scheme and legislation introduced by the post-war reforming Labour Government in 1949 served the nation well until the 1990s, as did the legal aid and assistance, or green form, scheme. However, I doubt whether those provisions could have survived much longer. Inevitably, Treasury limitations and changes in society made legal aid unsustainable in the form it took prior to the Access to Justice Act 1999. The status quo did not provide access to justice for all, so improved access to justice was at the heart of the CLS. Hitherto there had been gaps in terms of coverage, inappropriate application of means testing and geography—my hon. Friend the Parliamentary Secretary mentioned the "deserts". The 1999 Act provided a framework of provisions that potentially plugged many of those gaps and helped to fertilise the deserts. It provided a more coordinated approach to advice and assistance and ensured representation where appropriate. I use the word "potentially" because we have some way to go before the vision is realised. Today's debate is well timed, as local partnerships to deliver the CLS are being formed and steering committees across England and Wales are commencing their work.
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In my area, the London borough of Havering, trading standards officers, representatives of local firms of solicitors and the voluntary sector and, chiefly, the citizens advice bureau have set up a CLS partnership which will be at the heart of the area's community legal service provision. It will bring together those who fund legal advice services, including the Legal Services Commission, the local authority, local and national charities and those who supply services such as lawyer and advice centres. The partnership will produce a strategic plan for the provision of services. There is considerable enthusiasm locally, and it is important that the Government recognise and encourage such enthusiasm whenever and wherever possible. I should be pleased to hear from my hon. Friend the Parliamentary Secretary about the steps that he is taking to nurture the enthusiasm of local partnerships. The steering group has begun the important mapping exercise to identify needs, which is to be used in producing the strategic plan.
I must flag up what I regard as potentially the most problematic issue: funding. When discussing the role of local authorities, the hon. Member for Surrey Heath (Mr. Hawkins) referred to the briefing that the Law Society has produced for this debate. It is unclear how local authorities are to play their role, and my area, Havering, provides an example of how difficulties can arise. The Havering citizens advice bureau is a registered charity—as most of them are—which is wholly dependent on the London borough of Havering for its core funding to provide the salaries of its three paid workers and the running costs of its offices at Hornchurch, Romford, Harold Hill and Rainham. The management committee, all of whose members are volunteers, has been informed that its grant for the whole of the service in Havering will be £109,380 for the year beginning 1 April 2000. For the past five years, the grant made by the council has been insufficient to meet costs in full, so the management committee has subsidised the shortfall from other income and reserves. Despite detailed and repeated representations to the local authority, the award of standstill funding has taken no account of the changes in service delivery and the increasing needs of clients.
In September 1999, the bureau introduced a 24-hour, seven days a week recorded telephone message system. It dealt with 11,000 calls in five months. In the year ending 31 March 1999, Havering citizens advice bureau dealt with 17,424 people and 29,559 problems, including issues relating to housing, debt, money, employment and discrimination. In London, in 1999, the average cost of an inquiry at a citizens advice bureau was £11; in Havering, the cost was £3.26. Havering council has paid less than 50p per person per year for a service that is freely available to all who live and work in the borough. The statistics help to underline the importance of the local service. The number of calls handled and the efficient way in which the service is provided mean that it is well regarded throughout the borough, by my constituents and people in surrounding constituencies.
Despite that, the future of the service remains uncertain, because of Havering council's poor financial settlement under the standard spending assessment formula. I know that we are not debating local government finance, but if we expect local authorities to play an important role in the provision of the service, we must acknowledge that standard spending assessments

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are relevant. The borough council has adopted the Government's modernisation programme and ensured that all the schools in its area are properly funded, in accordance with its standard spending assessment for education. The council, regrettably, has had to increase the council tax by 8 per cent. in the past two years, while having to reduce spending in other important areas, such as the provision of elderly people's homes. The borough council, despite embracing the measures wholeheartedly, finds it difficult to maintain the core funding of the citizens advice bureau. The Government should be aware of that.
I am wholly in favour of the CLS, and I know the local partners in my area. Contrary to what the hon. Member for Surrey Heath says, many voluntary and professional organisations, including private practice solicitors, want the service to succeed. None the less, local authorities play an important role, especially in respect of funding, so we should be aware that they will find it increasingly difficult to do so if they have to work with reduced finances.
Let me change the subject slightly to insurance, which could play an innovative role in support of the CLS and to which I referred on Second Reading of the Access to Justice Bill. Legal service insurance cover could be expanded significantly to help to bridge the gaps in cover. Work is being done at a national level.
Mr. John Burnett: I keep hearing from people in private practice who do legal aid work that some insurance companies draft their conditions in such a way that they drive the litigation and the client and the lawyer are mere adjuncts. How does the hon. Gentleman propose to cure that particular deficiency?
Mr. Darvill: The hon. Gentleman makes a relevant point. That is why the Government and the CLS should engage at a national level with the insurance industry to ensure that the small print of insurance cover meets relevant needs. Additionally, I want to develop a service that I call a health check, which could be carried out in conjunction with the information technology industry and insurance companies. Citizens advice bureaux would have a computer facility that allowed members of the public to input information about their insurance cover, and the software would give them information about the extent of that cover. In short, there are two ways to deal with the hon. Gentleman's point: first, at a national level, the Government and the CLS can work with the industry, and, secondly, people should be able to go into a citizens advice bureau or a solicitor's office for the health check that I describe. Different people—those who travel abroad, own property or engage in business—have different insurance cover demands. There is no reason why programmes should not be developed that can provide individual health checks. Indeed, there could be advantages in that approach, which would ensure better cover nationwide.
The relevant legislation on, and the Government's policies towards, the co-ordination of cover at a local level are right. I have received the draft report from the CLS in my area, which was developed in conjunction with a long list of service providers, including Age Concern, the Alcohol Advisory Service and many others. My experience as a solicitor and, since entering
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the House, as a Member of Parliament, shows me that individuals can go to various providers of information, although there is often duplication. The Government have stated the honourable aim of helping to coordinate different approaches, which should ensure that relevant cover is available locally and enable more efficient use of resources.
I am disappointed that not more hon. Members are present in the Chamber to participate in this debate. We should monitor the extent to which local partnerships are developing across the country. There is much support for the service, but we want the service to benefit all of our constituents. In my view, hon. Members are uniquely aware, through their advice surgeries and their contacts with the community, of individuals' need for advice and assistance. Their unique experience could help to ensure that the service works. We should have frequent—perhaps annual—debates on the subject; that would ensure that it was monitored by the House. If we did that and worked with the CLS, I am sure that the service would be a success.
3.24 pm
Fiona Mactaggart: I am pleased to speak in this debate. Unlike all the hon. Members who have spoken before me, I am not a qualified lawyer, but I am the chair of Slough, Windsor and Maidenhead CLS partnership. It has been a privilege to work with all of the partners in that group, which seeks to improve the quality of legal advice and assistance that is provided in the community that I serve and in neighbouring communities.
The hon. Member for Surrey Heath (Mr. Hawkins) raised the question of what can be done to encourage local authorities that are not particularly active in improving the quality of their advice services. Our partnership provides an example of what can be done. The hon. Member for Windsor (Mr. Trend) had discussed with me the lack of free advice services in his constituency, so I persuaded our partnership to invite Windsor and Maidenhead to join us in discussing certain steps that we had taken to improve the quality of advice services in Slough. I am glad to say that Windsor and Maidenhead have become partners and are taking up that challenge. I believe that the quality of advice services in the Windsor constituency will improve in the long term.
I took on the role in the local CLS partnership because of my deep concern about access to legal advice—indeed, to all forms of advice—in the multiracial, multilingual constituency that I serve. I am struck by the contrast between the quality of legal advice and assistance that my constituents routinely experience, and that provided in the London constituency that I once represented at local council level. The single most important issue in respect of which my constituents seek my help is immigration, and many of them ask me to help them to unravel problems caused by the giving of, to be frank, very bad advice. Such advice is sometimes given by qualified lawyers and sometimes by agents who represent themselves as lawyers.
An urgent priority for our partnership was to improve the quality of legal advice on immigration available locally. I have learned over a long period that a legal

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qualification is not necessarily a guarantee of good-quality knowledge and advice on a particular issue. As I said, I have no legal qualifications, but I remember vividly an experience I had in the early 1980s, when I was general secretary of the Joint Council for the Welfare of Immigrants. I received a telephone call from a high street solicitor, who said, "I've got someone sitting in front of me who wants his wife to come and join him in Britain, but I can't find any reference to such a circumstance in the Immigration Act 1971." When I said, "You need to look at the immigration rules", his response was to ask, "Immigration rules? What are they?" I asked, "Do you think that you should be advising this person?", to which his reply was, "I'm a solicitor, why shouldn't I?"
I do not think that that solicitor should have advised that person. Because the inquiry was not particularly complicated and because he was legally qualified, he felt that he was qualified to give advice—but he was not. One aspect of the CLS partnerships that I welcome especially warmly is that they are based on quality standards and the principle that those who do not know their stuff do not get funding, even if they are lawyers. That is a radical and important change, which will ensure that people get better quality legal advice.
In the concordat that forms the basis of the partnership in Slough, Windsor and Maidenhead, the core vision is of a network of good quality legal and advice services. Many are already of good quality, but improvements can be made, for example, we can use quality standards as a way to unite and improve the quality of different types of service. Moreover, we can invest more in training of all kinds for groups who provide legal advice and assistance—citizens advice bureaux and voluntary groups, as well as lawyers.
The second point in our concordat is that the quality partnership should be supported by co-ordinated funding, and I want to make a plea in that respect. One big problem facing voluntary organisations that give advice and assistance is the number of different masters whom they have to please and the number of different auditing mechanisms, quality assurance standards and reporting methods that they have to adhere to. A real priority must be to obtain agreement on common standards between the Lord Chancellor's Department, local authorities, charities and the national lottery organisations. We can immediately and enormously increase the volume of advice that voluntary organisations give if they have only to meet one set of standards. The big challenge facing our partnership is to ensure that we move faster towards that single standard, so that everyone is asked to jump through the same set of hoops. At the moment, people are asked to jump through one set of hoops on Monday and another set on Tuesday, and then someone tells them that they should be in a different financial year anyway. We must make a priority of changing that.
The third bullet point in our concordat is to deliver services to local communities. That was what motivated me to become chair of our partnership: I could see that there were little centres of good advice in Slough about which some people did not know. Also, many people had legal problems but did not know that they were legal problems; because they had no idea that their housing
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difficulty, for example, could be tackled effectively by good legal advice, they did not seek such advice. Many people thought lawyers were frightening and expensive, and not for the likes of them. I want a CLS in which no one thinks in that way, and through which everyone thinks that they have a right to help.
When seeking that help in a constituency such as Slough, the first port of call is probably not the high street solicitor, but a church, mosque or residents association. People turn to those to whom they talk daily and who might have practice of dealing with lawyers, whom they believe to be frightening and expensive. Such intermediaries might speak their language better and can help people to reach the point at which they can get a qualified advocate. One of the visions of our CLS partnership is to draw in that network of people in and make them feel included. Small voluntary and community groups all have copies of our referral handbook, and some have entries in it because they are knowledgeable. The Pakistan welfare association knows the language of some of my constituents, whereas few solicitors in private practice do. We need to set up a partnership in which that association can know where its competence ends and when it should refer cases on. Part of the purpose of the handbook is to help people to know their limits.
If we achieve our aims, that will make the delivery of better quality legal advice cheaper. Fewer people will barge into a solicitor's office if they know that the unemployed workers centre or the Pakistan welfare association can deal with their problems. More people will receive advice more economically, thus enabling us to invest in creating a referral system that ensure that, for example, the people who need judicial review of their immigration case have someone who can represent their case excellently. That might lead to some improvements in our immigration law and administration. Also, we could invest in extending the availability of advice. We need to create mechanisms whereby referral works well.
As part of the launch of our CLS partnership, we carried out an interesting survey of private and voluntary agencies in Slough. The survey found that several concerns were shared equally between solicitors in private practice and voluntary advice givers. The great advantage of that survey was that people gained a greater awareness of each other's roles. Claire Fitzgerald said at our launch:
Clients come to solicitors for advice and are taken on and sometimes there is no real expertise in the practice to deal with the particular case, so it is handed to a junior member of staff. Solicitors and the voluntary sector must work hand in hand to try to establish the best way forward for a client. They should not worry about referring a client on either way. There should be trust between the private and voluntary sectors.
Creating a partnership is the first step in creating that trust.
Access is another important issue. Solicitors in Slough tend to be concentrated in the centre of the town, as do the voluntary advice services, but the people who need advice are often those who find travel difficult and whose mobility is restricted. There are no advice centres in the estates on the outskirts of Slough. I, as the Member of Parliament, am one of the few people who goes around the town and provides an advice service to deprived communities.

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One of the groups within the partnership is the unemployed workers centre. The National Lottery Charities Board has funded the centre to carry out an access project: run by Keith Spencer, it is designed to deliver basic benefits and other elements of welfare advice to people in their homes. That is the beginning of an expanding partnership and network. Through the partnership, other people are getting to know about Keith's services and are getting him to help those of their clients who cannot travel to the centre of town. We are beginning to improve the delivery services to local communities.
Mr. Burnett: Without wanting to put words into her mouth, I ask the hon. Lady whether she will be interested to hear from the Parliamentary Secretary about the progress that has been made in giving franchises to the not-for-profit sector.
Fiona Mactaggart: In my constituency, it is difficult to identify or develop good quality not-for-profit immigration advice, just as it is in the private sector. However, I think that we should treat all kinds of advice centres equally, whether they are solicitors, or advice agencies in the not-for-profit sector, or community organisations. If they meet quality standards, they should have access to funds, not only through franchises but, by meeting those standards, through local authorities. I should be interested in hearing about the progress that is being made, and it is possible that it is not happening fast enough. However, I am glad that we are taking steps down that road. Let us continue to do so.
The fourth point in our partnership's concordat is that the CLS should be in accordance with an effective assessment of local needs. That is the bit of the challenge that we have found most difficult to get right. Legal advice services in Britain have traditionally been provided according to where lawyers want to set up their business, or where voluntary organisations are established—services have been producer-led, which is a problem, because the best services are needs-led. Huge needs are hidden in a constituency such as mine, because people do not know that they need legal advice; they know that they have a problem, but not who can help them to tackle it.
One of the challenges that CLS partnerships face is reaching the sort of organisations to which I have talked, such as churches, mosques, residents associations and so on, and ensuring that they have a clearer awareness of what constitutes a legal problem and when someone needs legal advice so that they can more clearly express local needs. I hope to hear imaginative ways of doing that, because unless the CLS reaches those people, it will not have met the challenge.
On balance, it is right not to throw out the baby with the bath water by saying, "We will have a national legal service in the way that we have a national health service." Instead, we must say, "Let us improve quality by building partnerships with existing voluntary and private organisations and with bodies such as local councils which give quasi-legal advice to residents." However, to achieve that objective, we need to challenge all those providers to improve their act, to reach the parts that they are not reaching, to meet quality standards and to challenge other bodies that are not
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even thinking along such lines—for example, libraries—to ensure that people know whether their problem is a legal one and, if it is, where to go for help. The referrals handbook that I mentioned is available in Slough libraries, as well as in the other kinds of organisations to which I have referred.
We also need to ensure that people whose first language is not English get access to good quality legal services. I hope that that issue will be addressed. At present, there are often problems in funding interpretation services for people who need legal advice. The CLS cannot tackle all the problems in the first year of its existence, but that one must be tackled, because an inability to speak good English is a real barrier to access to good quality advice.
I am glad that quite a lot has already been done. I thank all the partners in the Slough CLS; they have begun to make it work. They have collaborated in ways that they did not at first think possible—they have met each other for a start, which in some cases is a great leap forward. They have enjoyed the experience of learning what the others do and are beginning to trust each other. We all need to find ways of reinforcing that trust because, unless it is properly developed, two-way referral will not occur and solicitors will not say to Age Concern, "This client would be better served by talking to you than by my taking up the case."
There is more work to do and there is a real challenge—the biggest challenge of all, which is to make sure that we create a legal advice service that makes it clear to people who have never had access to legal advice that they have a right to good advice; and we must deliver good advice, for until we do that, we fail those people. Focusing on how much money solicitors in private practice earn out of giving legal advice, as debates such as this always seem to do, is the wrong approach, because it implies that producers can determine the shape of the system. We need a new system in which consumers decide what kind of system we have. If we achieve that, we will truly have a national legal advice service.
3.44 pm
Mr. Lock: I am grateful for the permission of the Chamber to speak again. I shall be brief in closing what has been an interesting but reasonably short debate.
In answer to the observations of the hon. Member for Surrey Heath (Mr. Hawkins), I can only express great disappointment that, having sat through the debate for so long and having heard so much, he has so little understanding of what we are trying to do. That was brought home to me by the letter that I received from the chief executive to whom the hon. Gentleman referred, who said that the council was proud to fund the citizens advice bureau. He went on to say that the council did not
recognise your statement that a local authority such as Surrey Heath Borough Council is a principal funder of legal services.
That is the issue. My hon. Friends the Members for Slough (Fiona Mactaggart) and for Upminster (Mr. Darvill) spoke of the superb work of CABs and a variety of other organisations in the not-for-profit sector. If those organisations are telling someone whether he is entitled to benefits, they are delivering legal services. If they are telling someone whether he has

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a claim for unfair dismissal in an employment case or whether that person is entitled to a jobseeker's allowance, they are delivering legal services.
We must recognise that the monopoly that lawyers thought that they had in delivering legal advice and assistance does not prevail on the ground. When local authorities fund CABs, the valuable services that they are funding are legal services and they are not any less legal because they are provided by people who do not have magic letters after their names to show that they are formally qualified lawyers. As my hon. Friend the Member for Slough illustrated in an eloquent and accurate example, lawyers are often not the best people to deliver such advice anyway, but local authorities are funders of legal services.
Mr. Hawkins: The Minister does not have to take my word for it, because I wrote down carefully what the hon. Member for Upminster said in a measured and helpful contribution to the debate, which was:
It is unclear how local authorities will play that role.
He was referring to the funding role and pointed out that the grant from his local authority was insufficient to fund the citizens advice bureau in Havering. That is the problem. The Minister's policy is not working on the ground. Problems are arising in various areas of the country, as I have made clear.
Mr. Lock: The hon. Gentleman does not understand the system. It is discretionary for local authorities to fund CABs. It always has been. The Government have no proposals to change that. We want to ensure that when local authorities fund advice services, they do so in a way that makes sense, given the other funders in the area. I am proud that as a result of the CLS 330 not-for-profit agencies have now been awarded the quality mark.
Mr. Hawkins: Where is the money?
Mr. Lock: The funding for the not-for-profit sector, including CABs, has risen from its record level last year of £11 million from the Legal Services Commission to £29 million this year—an increase of 270 per cent. Yet the hon. Gentleman asks, "Where is the money?" An increase of 270 per cent. in funding in one year for the delivery of extra quality-marked services is a significant step in the right direction. I repeat that it is disappointing that, after having heard so much and listened so long, the honourable Gentleman has so little understanding of the way in which we will deliver important legal services to those who really need them.
Most lawyers, including those in the not-for-profit sector, working under legal aid are not fat cats, and I would not dream of suggesting that they are; nor did I. They deliver quality services for a reasonable return. However, the obligation on a Government Department is to secure value for money in the services that it purchases. Throughout the country we have a full coverage of services, with the exception of one or two problems in immigration, which we are working hard to solve. The prediction that lawyers would not sign up for
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contracts at the rates that we were prepared to pay has proved incorrect. For example, family services are provided in all legal aid bid zones.
Hon. Members will no doubt say that family problems tend to come in at least twos, if not threes. I am, therefore, pleased to say that 98 per cent. of bid zones have at least two firms of solicitors under contract providing quality services. However, we will not contract for the provision of services with lawyers whose only expertise is the fact that at some point in the distant past they passed a law examination and their Law Society finals. The problems involved are too complex and important to be left to the dabblers. We shall contract with firms that have a quality standard, so that we know that the services being provided are quality services, and we shall pay the amount necessary to secure those services. If we paid more, we would help fewer people.
I am grateful for the contribution of my hon. Friend the Member for Upminster, whose analysis of circumstances in his area was extremely interesting. I assure him that I have taken careful note of the differences in the cost of provision of advice in Havering compared with the rest of London. It is interesting to compare the cost of provision of benefit or debt advice through the not-for-profit sector and the traditional green form scheme for lawyers, and to ask which is the best way of procuring that advice, whether we can be sure of quality standards and whether it is right to pay anything up to 10 or 15 times more merely because the advice is provided by a qualified lawyer. Although it may occasionally be right to do so, we have a general duty to secure best value.
Mr. Darvill: I am interested in the point that the Parliamentary Secretary makes. Will his Department ensure that such an analysis is made, especially in identifying good practice? If necessary, will representations be made throughout the Government to ensure that, for example, the Department of the Environment, Transport and the Regions is aware when local authorities and citizens advice bureaux are not providing that best value?
Mr. Lock: Yes, that research is being done and the results will be published. I shall ensure that my colleagues in the Government are aware of the benchmark figures that we extract from the research to show the appropriate levels of payment and the return in different areas. In both the not-for-profit and the for profit sectors, some firms and providers are much more efficient at providing quality services than others. As public money is involved, it is important that those who say that they cannot deliver the service for a particular price should look in the first instance at other providers, firms of solicitors and not-for-profit operators that can work within those budget lines and produce a quality service, and learn from best practice elsewhere.
I shall make a few observations on my hon. Friend's comments on insurance. He is right to say that both before-the-event and after-the-event insurance play a significant role. A significant problem is that, although many people have legal expenses insurance with their household insurance, when they have a problem they are not aware that the £10 or £12 a year tacked on at the end of their insurance form, which they signed a long time

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ago, can be the gateway to the help that they need, rather than it being provided by the public purse through a lawyer of their choice. People have that right under a European directive. I am grateful to the hon. Gentleman for raising that point because it is important to make people aware that they may already have insurance. Millions of people do. We must publicise that fact and ensure that lawyers ask their clients the right questions to ascertain whether those clients already have cover. Ultimately, the points made by the hon. Member for Upminster about a vibrant insurance market are right. As in other areas, the quality of service and number of restrictions in legal expenses insurance will be sorted out by the market and pressure from the Government. We should make sure that the insurance industry delivers services in a way that is suitable for the consumer.
I congratulate my hon. Friend the Member for Slough on her work in CLS partnership in her area. She has worked through the process and has understood, from long experience, why what we are delivering is so important. It focuses on unmet need—people who would never dream of consulting a firm of solicitors but are greatly in need of legal advice. She recognises the consequences of not delivering that advice, not providing such pathways out of social exclusion and not allowing people to get the most out of their lives because of what holds them back. That is key to the Government's attempt to tackle social exclusion and create opportunity.
My hon. Friend the Member for Slough referred to the importance of having only one quality standard. I entirely agree with her. The quality mark produced by the CLS should be the benchmark, whether it is a local authority seeking to satisfy itself that it is funding a citizens advice bureau under a best value regime, whether it is the National Lottery Charities Board or whether it is the CAB. Whatever organisation is seeking to deliver services through the CLS, that should be the core quality standard to which they should be required to work by any funder within the CLS. A single quality standard will ensure that one year will not end on a Monday for one funder while a second year ends on a Tuesday for a different funder. Similarly, there will not be one type of working and set of goals, objectives and key performance indicators for one funder and a totally different set for another. I hope that all funders will recognise that more of their money will go to providing services and less to carrying out administration if they are prepared to trust the quality mark as the single indicator of quality services. That will allow organisations to work in accordance with a single set of coherent policies. I assure my hon. Friend that that is beginning to happen.
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My hon. Friend is right about translation services. As part of the invest-to-save budget, the CLS website "Just Ask!" is in the process of translating the CAB advice guide. Therefore, valuable practical advice on benefits, housing and employment, including detailed legal advice, will be available in the six most used United Kingdom community languages. I am sure that that will be useful in her constituency for those advisers who are able to access the net.
My hon. Friend the Member for Slough challenged me to find imaginative ways of reaching communities to identify priority areas of unmet legal need. I shall give two examples of what is happening. In Newcastle, the Legal Services Commission is funding an immigration co-ordinator to work with advice agencies to help asylum seekers to obtain the right advice from the right person, where there is capacity and firms are able to deal with cases, and to ensure that the referral system works properly. In that way, help can be co-ordinated so that asylum seekers receive the advice they need from someone who can provide them with the quality of advice which they are entitled to expect.
In Liverpool, debt advisers are working in GP surgeries through the CLS partnership. GPs identified the need for their elderly patients to maximise their income so that they can turn up the heating and have a better quality of life. Many elderly people who would not have gone to the citizens advice bureau with cap in hand to ask for benefits advice to improve their income can now obtain that advice in their GPs' surgeries which they visit anyway. That is good for GPs, the advice comes from the citizens advice bureau and is of high quality, and the service is of real benefit to Liverpool's elderly citizens who can take advantage of services in a way that they would not have done previously.
This has been a short, but an interesting debate. It has shown how the Government's policies on development of community legal services are working. Developing networks and delivering the services that are needed in each community will take a generation, not 12 months. This is a long-term process and a change of culture, but the Legal Services Commission has made an impressive start. The development of partnerships throughout the country is changing the way in which services are being commissioned and delivered. I am grateful to my hon. Friends the Members for Upminster and for Slough who have given such strong support for the initiative and have brought experiences from their communities to help us in our debate this afternoon.
Question put and agreed to.
Adjourned accordingly at two minutes past Four o'clock.

SOCIAL SECURITY

  Winter Fuel Allowance
  Mr. Ruffley
  To ask the Secretary of State for Social Security when men aged between 60 and 64 years in the Bury St. Edmunds constituency will receive their Winter Fuel Allowance; and if he will make a statement on the reason for the delays. [129021]

  Angela Eagle
  Retrospective payments for previous years Winter Fuel Payments started to be paid in the week commencing 26 June 2000 in line with Government's targets. The payments will be issued as claims are processed and are not defined in postcode areas. Some customers in Bury St. Edmunds may have already received their payment and the remainder will receive them over the coming months as claims are received and processed.

  Claimants (Criminal Convictions)
  Mr. Cohen
  To ask the Secretary of State for Social Security what plans he has to modify the benefit arrangements for claimants who have criminal convictions which will appear on criminal conviction certificates and other certificates issued under the Police Act 1997; what assessment he has made of the extent to which details displayed on certificates may result in claimants being unable to find suitable work easily; what plans he has to increase payments to claimants who are obliged to certificate on a regular basis; and if he will make a statement. [129138]

  Angela Eagle
  We have no plans to modify the benefit arrangements for claimants who have criminal convictions which will appear on criminal conviction certificates and other certificates issued under the Police Act 1997.

  The Home Office will be working closely with relevant organisations to ensure that guidance is provided to encourage employers not to reject applicants with a criminal record without careful consideration of all the relevant factors.

  PFI Contracts
  Mr. Alan Williams
  To ask the Secretary of State for Social Security if he will list the PFI contracts entered into by his Department, indicating(a) their dates of commencement, (b) their value, (c) if they have been subject to refinancing and (d) if his Department has a claw-back entitlement to share in savings arising from refinancing. [129057]

  Mr. Rooker
  The PRIME (Private Sector Resource Initiative for Management of the Estate) contract, commenced on 1 April 1998. It has an estimated private 240W
  sector capital spend value of £350 million. It has not been subject to refinancing and has no specific refinancing share mechanism, but does provide for possible sharing of windfall gains and profits, including benefits from refinancing, made in the first five years.

  The ACCORD (Access to Corporate Data) project has so far progressed to signature of four Services Agreements, which are contractual vehicles to enable the Department to award specific PFI/PPP contracts in future. None of the Service Agreements contains a monetary value, but the projects estimated private sector capital spend value is £100 million. No contracts yet exist, and contract negotiations will include possibilities for sharing in future savings.

  Multiple Sclerosis
  Mr. Tynan
  To ask the Secretary of State for Social Security how many of the claims for disability living allowance from sufferers of MS were rejected by the tribunal because the sufferer was in temporary remission in the last three years. [129001]

  Mr. Bayley
  The information requested is not readily available and could be obtained only at disproportionate cost.

  Hunting with Hounds
  Mr. Clifton-Brown
  To ask the Secretary of State for Social Security, in respect of implementation of the Burns report on banning hunting with hounds, what estimate he has made of the total additional social security payments which will fall to be paid, broken down by type of benefit. [129038]

  Angela Eagle
  The Burns Report (The Final Report of the Committee of Inquiry into Hunting with Dogs in England and Wales) investigated the effects of banning hunting on employment. Its finding was that, in view of all the uncertainties, it is not possible to give a precise figure for the number of jobs that would be lost if hunting were banned. Consequently, it is not possible to estimate accurately the effects on Social Security expenditure.

  Pensions
  Mr. Cousins
  To ask the Secretary of State for Social Security, pursuant to his answer to the hon. Member for Northavon (Mr. Webb) of 26 June 2000,Official Report, columns 348–49W, on pensions, if he will re-present the figures assuming (a) the state second pension remains earnings related and (b) the minimum earnings guarantee is available to those who made no second pension provision and the Minimum Income Guarantee is uprated in line with earnings; if he will set out the assumptions about investment returns which underly his estimates of returns on stakeholder pensions; what assumption he has made about the level of contributions to stakeholder pensions; and if he will estimate the effects of these projections based on 75 per cent. of average earnings. [128623]

  Mr. Rooker
  The information is in the tables.
  241W

  Estimated basic and compulsory second tier pension for someone on average earnings throughout their working life who reaches pensionable age in 2050, assuming state second pension remains earnings-related

  £

  All

  Man

  Woman

  Basic Pension

  31.00

  31.00

  31.00

  Additional Pension from State scheme or stakeholder pension

  71.00

  73.00

  67.00

  Total Pension

  102.00

  103.00

  98.00

  Estimated basic and compulsory second tier pension for someone on 75 per cent. of average earnings throughout their working life who reaches pensionable age in 2050, assuming state second pension remains earnings-related

  £

  All

  Man

  Woman

  Basic Pension

  31.00

  31.00

  31.00

  Additional Pension from State scheme or stakeholder pension

  65.00

  67.00

  67.00

  Total Pension

  96.00

  98.00

  91.00

  Notes:

  1. Figures, which are in 1999 earnings terms, are rounded to the nearest £ and may not sum as a result.

  2. The estimates are based on 100 per cent. and 75 per cent. of average earnings of (i) all full-time employees; (ii) all male full-time employees; and (iii) all female full-time employees.

  3. The estimates are based on a person beginning work at 16 and working for 49 years until age 65.

  4. The estimates are based on the Department's Lifepen model and the following assumptions:

  Stakeholder pensions start April 2001

  State Second Pension starts April 2002

  Earnings grow 1.5 per cent. a year faster than prices

  Basic State pension is uprated in line with prices

  Projections for stakeholder pensions are based on National Insurance rebates only. They are estimated weekly amounts a person would receive if the investment return and other relevant factors affecting the amount of the stakeholder pension were the same as the assumptions underlying the calculation of the National Insurance rebates paid into a stakeholder pension. No allowance is made for voluntary contributions made by individuals or their employers.

  The level of the rebates will be determined by the Secretary of State based on the advice of the Government Actuary. The assumptions which underlie the rebate, including investment return, will be the subject of a consultation exercise by the Government Actuary this summer, culminating in an Order to be laid before Parliament no later than April 2001. The Order will set the rebate rates for the period April 2002 to March 2007.

  In 1999 earnings terms, the value of the Minimum Income Guarantee would remain constant at £75 a week if it were consistently increased in line with earnings.

  Child Benefit
  Angela Smith
  To ask the Secretary of State for Social Security how many people receive Child Benefit by area in Great Britain. [129912]

  Mr. Darling
  Figures for the numbers of families receiving Child Benefit as at 14 August 1999 broken down by parliamentary constituency, government office region and local authority have been placed in the Library.

  Pensioners
  Mr. Dismore
  To ask the Secretary of State for Social Security how many pensioners in Hendon are aged over(a) 65, (b) 75 and (c) 85 years; how many in each of (a) to (c) receive minimum income guarantee; and how many (i) pensioners and (ii) pensioner couples will (1) receive winter fuel payments this year and (2) qualify for a free television licence. [129276]

  Mr. Rooker
  The information is not available in the format requested. Such information as is available is in the table.

  Number of pensioners receiving the minimum income guarantee in Hendon parliamentary constituency

  Age of Claimant

  Number of claimants

  65–74

  800

  75–84

  900

  85 and over

  700

  Notes:

  1. Figures for pensioners receiving the minimum income guarantee are based on a 5 per cent. sample and are therefore subject to a degree of sampling error. For this analysis pensioners are defined as where the claimant is aged 65 or over. Figures have been rounded to the nearest hundred.

  2. The numbers eligible for winter fuel payments include some people aged between 60 to 64 who are not yet eligible for a pension.

  3. The numbers of pensioner households qualifying for free television licenses refer to any household which is the primary place of residence for any pensioner aged 75 or over.

  4. Information about the numbers of pensioners in Hendon is not held.

  Source:

  Income Support Quarterly Statistical Enquiry, February 2000

  We estimate that around 19,000 people will be eligible for winter fuel payments in the Hendon constituency this winter. It is not possible to give a further breakdown of these figures at this stage.

  Three million pensioner households will qualify nationally for a free television licence this year. We do not hold this information at local level.

TRADE AND INDUSTRY

  Correspondence
  Mrs. Virginia Bottomley
  To ask the Secretary of State for Trade and Industry when he will reply to the letter from the right hon. Member for South-West Surrey of 28 February concerning Mr. M. Grove. [127347]

  Mr. Byers
  As the right hon. Lady has been informed, the issue she has raised is a matter for my right hon. Friend the Chancellor of the Exchequer, and I have therefore passed the correspondence to him.

  Mrs. Roe
  To ask the Secretary of State for Trade and Industry when the hon. Member for Broxbourne will receive a reply to her letters of(a) 3 April, (b) 5 May, (c) 1 June and (d) 29 June relating to her constituent Mr. S. Kitchiner. [128916]

  Mr. Alan Johnson
  [holding answer 4 July 2000]: I replied to the hon. Member on 4 July 2000.

  Start-up Assistance
  Dr. Kumar
  To ask the Secretary of State for Trade and Industry how many businesses have benefited from start-up assistance from Government schemes; what types of business have benefited; and what initiatives have been taken in the years 1997 to 2000(a) nationally, (b) in Teesside and (c) in the constituency of Middlesbrough, South and Cleveland, East; and if he will make a statement. [128512]

  Ms Hewitt
  Numbers of businesses which have used Business Link services, which includes advice to people wanting to start their own business, since 1997 is as follows:

  Year

  Number

  1997–98

  446,040

  1998–99

  393,580

  1999–2000

  419,294

  Note:

  Businesses using BL more than once in a quarter count only once. Business using BL more than once in different quarters are counted in each quarter.

  Nationally, the following major initiatives have been taken since 1997: the Government made their commitment in the Competitiveness White Paper published in December 1998 to provide a new high-quality advice service to 10,000 businesses in England per annum by the end of 2001, focusing on those with high growth potential; the Small Business Service, launched in April this year, will provide information, advice and access to experts on all aspects of running a business. The SBS is ensuring that the Business Link Network tailors its services to the different needs of the whole range of smaller businesses, including the self-employed and those considering starting-up in business; my right hon. Friend the Chancellor of the Exchequer announced on 23 June this year a new package of help worth up to £500, and £2000 in areas of high unemployment, for anyone in Britain wanting to start up in business; the DTI is spending some £3 million on the Business Volunteer Mentoring Scheme, which is currently being piloted. The scheme is based on a core of volunteers—both retired and otherwise—drawn from all sections of the business community and who will provide mentoring for pre-start-ups, start-ups and those businesses yet to reach the stage of stability.

  In Teesside, Start Right in Business, a Tees Valley TEC-led partnership, aims to provide support and funding to help create and maintain 900 new businesses during 1999–2001. The partnership brings together unemployed people, local authorities, Business Link Tees Valley, local enterprise agencies, banks and private sector sponsors to give training, advice and support to people wanting to set up their own business.

  No separate information is available for the constituency of Middlesbrough, South and Cleveland, East.

  Former Officials (Employment)
  Mr. Mitchell
  To ask the Secretary of State for Trade and Industry how many officials, on ceasing employment in his Department, have sought permission to take up 244W
  employment, since May 1997, with (a) companies and (b) partnerships under the business appointment rules; and to what companies and partnerships they went. [128453]

  Dr. Howells
  Between May 1997 and June 2000, a total of 195 applications have been made to take up external appointments. As applicants are not required to detail the status of the organisation they are proposing to join, it is not possible to break down applications by type of organisation.

  Only senior Crown servants are required to notify that they have taken up appointment after their applications are approved. The following information details relevant appointments that have been taken up:

  Appointment

  Approved

  Date post taken

  Oxford Inst. of Energy Research

  July 1997

  August 1997

  Cambridge Energy Research

  April 1997

  May 1997

  British Airways

  May 1997

  May 1997

  Eagle Star

  October 1997

  October 1997

  BAT Industries

  June 1998

  September 1998

  Covington & Burling

  June 1998

  November 1998

  Industrial Bank of Japan

  September 1998

  November 1998

  DNA Research Instruments

  May 1999

  May 1999

  Wragge & Co.

  January 2000

  January 2000

  Wastepack UK Ltd.

  February 2000

  February 2000

  Expocentric.com

  May 2000

  May 2000

  Tolman-Cunard

  May 2000

  May 2000

  Further information on appointments approved prior to May 1999 is published in the First and Second Reports of The Advisory Committee on Business Appointments that are available in the Library of the House. Details of appointments approved since May 1999 will be covered in the Third Report of the Advisory Committee.

  Malaysia
  Mr. Alan Simpson
  To ask the Secretary of State for Trade and Industry if he will list the export licences granted for the export of(a) CS gas, (b) CS irritant cartridges and (c) CS canisters to Malaysia (1) in each year since 1992 broken down by category code; [128552]

  (2) since 1992 where end use destination was for other countries. [128553]

  Dr. Howells
  The entry in the legislation under which the export of goods is controlled is known as their rating. The export of CS gas, CS irritant cartridges and CS canisters are controlled under entries in Part III of Schedule I of the Export of Goods (Control) Order 1994 as amended (commonly known as the Military List): CS and other irritants under entry ML7; cartridges (as ammunition) containing CS irritants under entries ML3 or PL5021 and canisters containing CS irritants under ML4 or PL5030. However, a variety of other devices may contain tear gas and these are also controlled under the latter four entries above as well as several other entries: for instance, portable anti-riot devices for administering an incapacitating substance under PL5001; grenades under ML4 or PL5030; ammunition (including artillery and mortar) under ML3 or PL5021; gas projectors or generators under ML2 or PL5018; gas projecting equipment for controlled ground vehicles, combatant vessels or aircraft, that are specially designed or modified for military use under entries ML6, ML9, or ML10 respectively; and portable devices designed for self-protection by the administration of an incapacitating
  245W
  substance under entry 1A905 of the Dual-Use and Related Goods (Export Control) Regulation 1996, as amended. It should be noted that other goods may also be controlled under each of these entries.

  The Export Control Organisation's computer databases have been interrogated. Between 1 January 1992 and 1 May 1997, 548 Standard Individual Export Licences (SIELs) were issued covering the export to consignees or end users in Malaysia of goods with the relevant ratings: in the same period six SIELs were issued covering such exports to consignees in Malaysia with end users in any other destination.

  Individual licences may cover a range of goods with various ratings and OIELs may cover a range of countries. Where this is so, the licence is included in the table in the total for all the relevant ratings.

  SIELs issued between 1 January 1992 and 1 May 1997 covering the export of goods with the relevant ratings to consignees in Malaysia with endusers in Malaysia and other destinations

  Rating

  Malaysia

  Australia

  Indonesia

  Kuwait

  Singapore

  ML2

  68

  0

  1

  0

  0

  ML3

  17

  0

  0

  0

  0

  ML4

  128

  0

  1

  0

  0

  ML6

  83

  0

  0

  0

  0

  ML7

  47

  0

  0

  0

  0

  ML9

  45

  1

  0

  0

  0

  ML10

  157

  0

  0

  1

  2

  PL5001

  3

  0

  0

  0

  0

  PL5018

  10

  0

  0

  0

  0

  PL5021

  2

  0

  0

  0

  0

  An Open Individual Export Licence (OIEL) is specific to an individual exporter and covers multiple shipments of specified goods to specified destinations and/or, in some cases, specified consignees; these licences do not authorise exports by the licensee other than to those destinations specified on the licence and do not prohibit transfer between those permitted destinations. The Export Control Organisation's computer databases have been interrogated. Between 1 January 1994 and 1 May 1997, 57 OIELs were issued covering the export of goods with the relevant ratings to Malaysia and any other destination.

  OIELs issued between 1 January 1994 and 1 May 1997 covering the export of goods with the relevant ratings to Malaysia and any other destination

  Rating

  Number of OIELs issued covering goods with this rating

  ML2

  4

  ML3

  3

  ML4

  13

  ML6

  5

  ML7

  1

  ML9

  14

  ML10

  19

  PL5001

  2

  PL5018

  1

  Details of SIELs and OIELs issued between 2 May and 31 December 1997 were set out in the Government's Annual Report on Strategic Export Controls, published by the Foreign and Commonwealth Office: one of the SIELs issued in this period covered the export of such goods to Malaysia with an end user in the United Arab Emirates.
  246W
  Details of SIELs and OIELs issued between 1 January and 31 December 1998 were set out in the Government's second Annual Report on Strategic Export Controls; copies of both reports are available from the Library of the House: five SIELs issued in this period covered the export of such goods to Malaysia with an end user in any other destination.

  SIELs issued between 1 January 1998 and 31 December 1998 covering the export of goods with the relevant ratings to consignees in Malaysia with end users in other destinations

  ML4

  ML10

  Brunei

  0

  1

  Chile

  1

  0

  Hong Kong SAR

  1

  0

  Philippines

  0

  1

  Singapore

  1

  0

  Between 1 January 1999 and 23 June 2000, 69 SIELs were issued covering the export of such goods to consignees and end users in Malaysia. In the same period, one SIEL was issued covering such exports to a consignee in Malaysia with an end user in Singapore. In the same period, 32 OIELs were issued covering the export of such goods to Malaysia and any other destination.

  SIELs issued between 1 January 1999 and 23 June 2000 covering the export of goods with the relevant ratings to consignees in Malaysia with end users in Malaysia and other destinations

  Rating

  Malaysia

  Singapore

  ML2

  12

  0

  ML3

  10

  0

  ML4

  11

  1

  ML6

  4

  0

  ML7

  4

  0

  ML9

  8

  0

  ML10

  24

  1

  PL5001

  1

  0

  OIELs issued between 1 January 1999 and 23 June 2000 covering the export of goods with the relevant ratings to Malaysia and other destinations

  Rating

  Number of OIELs issued covering goods with this rating

  ML2

  1

  ML4

  1

  ML6

  5

  ML9

  11

  ML10

  15

  PL5018

  1

  It would entail disproportionate cost to establish which, if any of these licences covered the export of the particular types of equipment concerned, and make any subsequent inquiries necessary under the Code of Practice on Access to Government Information.

  All of the information set out should be considered in light of the answer I gave to my hon. Friend the Member for Kingswood (Mr. Berry) on 27 July 1999, Official Report, columns 307–08W.
  247W
  Finally, Malaysia is a permitted destination on certain Open General Export Licences covering the export of goods on the Military List and other goods; copies of all Open General Export Licences are routinely placed in the Library of the House.

  Research Councils
  Mrs. Ellman
  To ask the Secretary of State for Trade and Industry what discussions are taking place in the Office of Science and Technology concerning the future of the Council for the Central Laboratory of the Research Councils. [128858]

  Ms Hewitt
  My right hon. Friend the Secretary of State announced the terms of reference for the quinquennial review of the Council for the Central Laboratory of the Research Councils in his reply to the hon. Member for Birmingham, Northfield (Mr. Burden) on 13 June 2000,Official Report, columns 596–97W.

  Daresbury Laboratory
  Mrs. Ellman
  To ask the Secretary of State for Trade and Industry what plans are being considered for the future of the Daresbury Laboratory as a scientific research establishment after 2007. [128857]

  Ms Hewitt
  The future of Daresbury laboratory is a matter for the Council for the Central Laboratory of the Research Councils (CCLRC) which, under its Royal Charter, is responsible for the staff and resources under its control. Further to this, the Government have recognised the need to consider Daresbury's role in the North West Science Base and have commissioned two reviews to consider this matter. I refer the hon. Member to the announcements of the North West Science Review on 27 April 2000 and the North West Science and Daresbury Development Group on 9 June 2000,Official Report, column 388W.

  Assisted Areas
  Mr. Hesford
  To ask the Secretary of State for Trade and Industry if he will make a statement on the effect on small and medium-sized enterprises of the assisted area status policy. [128865]

  Mr. Caborn
  My right hon. Friend the Secretary of State for Trade and Industry announced the introduction of Enterprise Grant Areas in England on 15 July 1999,Official Report, column 275W. Small and medium sized enterprises in the Enterprise Grant Areas and in Tiers 1 and 2 of the Assisted areas are eligible to apply for Enterprise Grants. The introduction of Enterprise Grant Areas significantly increased the number of areas in England where small and medium sized enterprises could apply for grants to support investment.

  Package Holidays
  Mr. Roy
  To ask the Secretary of State for Trade and Industry how many complaints his Department has received in the last 12 months in relation to the pricing of foreign package holidays. [128997]

  Dr. Howells
  According to Departmental records, a total of 46 complaints were received in the last 12 months in relation to the pricing of foreign package holidays. Seventeen of these were from the same person.

  Hyder Plc
  Mr. Gibb
  To ask the Secretary of State for Trade and Industry what his policy is regarding the repatriation of the consideration of competition issues arising from the sale of Hyder plc. [129031]

  Dr. Howells
  [holding answer 4 July 2000]: The Director General of Fair Trading advises this Department on the competition issues raised in cases that have fallen to the EC Merger Regulation. The Secretary of State will assess whether Western Power Distribution Limited's proposed acquisition of Hyder Plc meets the tests laid down in the EC Merger Regulation by which member states can request referral of cases from the Commission and whether to request such a referral in the light of the DGFT' s advice.

  Exports Credits Guarantee Department
  Mr. Oaten
  To ask the Secretary of State for Trade and Industry if he will make a draft regulatory impact assessment in advance of the announcement of the conclusions of the review of the Export Credits Guarantee Department. [129394]

  Mr. Caborn
  There are no plans to make a Regulatory Impact assessment in advance of the Review announcement. It is unlikely that the Review will lead to any legislation or change in regulations.

  Memo Leak
  Mrs. Browning
  To ask the Secretary of State for Trade and Industry what plans he has to launch an inquiry into the leaking of a memo sent to him by Andrew Fraser. [129416]

  Mr. Byers
  An internal inquiry into the leaking of the memo sent to me by Andrew Fraser is underway.

  Commuter Coach Services
  Mr. Wyatt
  To ask the Secretary of State for Trade and Industry if he will refer the operation of Commuter coach services from Kent to London to the Competition Commission. [129311]

  Dr. Howells
  Under UK competition law in the first instance, it is the responsibility of the Director General of Fair Trading (DGFT) to investigate allegations of anti-competitive behaviour and possible abuses of a dominant position.

  If my hon. Friend has any evidence that competition in this market is not working, he should draw it to the attention of the DGFT.

  Post Office (Subsidies)
  Mrs. Browning
  To ask the Secretary of State for Trade and Industry what discussions he has held with small business organisations concerning his proposals to pay subsidies to sub-post offices. [129431]

  Mr. Byers
  In preparing their report "Counter Revolution: Modernising the Post Office Network", the Performance and Innovation Unit (PIU) had discussions with a number of organisations representing small businesses. In addition, both the PIU and I have had extensive discussions with the National Federation of
  249W
  Subpostmasters about the Government's proposals for financial assistance to modernise and improve the sub-post office network.

  Mrs. Browning
  To ask the Secretary of State for Trade and Industry what discussions he has held with the EU concerning his proposals to pay subsidies to sub-post offices. [129432]

  Mr. Byers
  The European Competition Commissioner has been informed about the new package of measures to modernise the post office network. Throughout the process of developing detailed projects officials will work in close consultation with the European Commission.

  Mr. Redwood
  To ask the Secretary of State for Trade and Industry (1) what recent discussions he has had with the European Commission about the legality of granting subsidies to post offices; [129212]

  (2) if he has clearance from the EU competition authorities to grant subsidies to post offices. [129211]

  Mr. Byers
  I refer the right hon. Member to the answer given today to the hon. Member for Tiverton and Honiton (Mrs. Browning).

  Post Office Network
  Mrs. Browning
  To ask the Secretary of State for Trade and Industry how many sub-post offices are projected to close in(a) 2000–01, (b) 2001–02 and (c) 2002–03. [129418]

  Mr. Byers
  As all sub-post offices are privately owned and operated, there can be many different reasons leading to a decision to close and there is no accurate way of forecasting future closure levels. However, the Post Office seeks to maintain post office services wherever possible and this policy is being reinforced by the Government's requirement on the Post Office to maintain the rural network and to prevent any avoidable closures of rural post offices.

  Mrs. Browning
  To ask the Secretary of State for Trade and Industry if he will place in the Library a copy of the research by Christie and Co., referred to on page 62 of the Performance and Innovation Unit's report into the post office network. [129430]

  Mr. Byers
  Christie and Co. provided information about sub-post offices to the Performance and Innovation Unit on an exclusive and confidential basis as the information was and is commercially sensitive. I am therefore unable to place a copy of this research in the Library of the House.

  Mrs. Browning
  To ask the Secretary of State for Trade and Industry what research his Department has commissioned into the impact of Internet-based services on the letters market. [129420]

  Mr. Byers
  This issue is kept under review by the Post Office.

  Mrs. Browning
  To ask the Secretary of State for Trade and Industry (1) what estimate he has made of the level of remuneration sub-post masters will receive for acting as Government general practitioners; and if he will make a statement; [129423]
  250W
  (2) what level of additional investment the Horizon platform will require to operate the universal bank; [129427]

  (3) if the Government intend to provide financial support for the improvement of the urban post office network recommended on page 88 of the Performance and Innovation Unit's report into the post office network; [129426]

  (4) what estimate he has made of the (a) setting up cost and (b) annual running cost of the universal bank; [129424]

  (5) if benefit claimants who opt to receive their benefits in cash from a post office following the switch to ACT will be required to have a bank account; [129428]

  (6) what plans he has for delivery of funds to support post offices in urban deprived areas; [129434]

  (7) what estimate he has made of the income to the Post Office which will be generated by the universal bank; [129425]

  (8) what estimate he has made of the impact on the income of sub-post offices if those people who do not have a bank account at present start to pay utility bills by direct debit following the introduction of the universal bank; [129429]

  (9) how much funding he will commit to improve post offices in deprived areas. [129433]

  Mr. Byers
  I refer the hon. Member to my statement and subsequent exchanges on 28 June 2000,Official Report, columns 907–20, and the PIU report also published on 28 June, copies of which have been placed in the Library of the House and the Vote Office.

  Mrs. Browning
  To ask the Secretary of State for Trade and Industry what percentage of rural sub-post offices have ISDN lines. [129421]

  Mr. Byers
  I understand from the Post Office that they do not have a percentage breakdown of rural post offices which currently have an ISDN line, but every post office will have an ISDN line or equivalent satellite link by February 2001.

  Mrs. Browning
  To ask the Secretary of State for Trade and Industry what estimate he has made of the cost of installing ISDN lines to the post office network. [129422]

  Mr. Byers
  Under the existing Horizon programme, every post office outlet will have an ISDN line or equivalent satellite link by February 2001. The costs are an integral part of the Horizon contract.

  Petrol Prices
  Mr. Boswell
  To ask the Secretary of State for Trade and Industry if he will list the average figures for European unleaded petrol prices for each country of the European Union in pence per litre, with the amount of tax paid and the percentage of tax this represents. [129285]

  Mrs. Liddell
  The latest available information for premium unleaded petrol prices and taxes is for April 2000 and is as shown.
  251W

  European Unleaded Petrol Prices1

  Prices as at mid April 2000

  (Pence per litre2)

  (Percentage)

  Pump Price

  Amount of Tax

  Tax Component

  Austria

  56.10

  34.50

  61.5

  Belgium

  63.35

  41.75

  65.9

  Denmark

  64.23

  44.32

  69.0

  Finland

  67.83

  46.19

  68.1

  France

  65.26

  46.40

  71.1

  Germany

  57.84

  42.11

  72.8

  Greece

  45.29

  24.91

  55.0

  Ireland

  50.51

  31.72

  62.8

  Italy

  63.01

  42.03

  66.7

  Luxembourg

  48.70

  27.76

  57.0

  Netherlands

  68.52

  46.39

  67.7

  Portugal

  53.84

  28.10

  52.2

  Spain

  48.58

  29.25

  60.2

  Sweden

  66.45

  46.05

  69.3

  United Kingdom

  79.96

  60.77

  76.0

  1Premium unleaded 95RON

  2Prices converted to pounds sterling using mid April exchange rates.

  Source:

  European Commission Oil Bulletin

  Mr. Boswell
  To ask the Secretary of State for Trade and Industry what has been the change in petrol prices per litre, at an annual rate, in each month since March 2000. [129271]

  Mrs. Liddell
  The information requested is in the following table.

  1999

  2000

  Difference

  Pence per litre

  Pence per litre

  Pence per litre

  Percentage change

  Premium unleaded petrol

  March

  66.51

  78.32

  11.81

  17.8

  April

  70.20

  79.96

  9.76

  13.9

  May

  70.04

  79.54

  9.50

  13.6

  June

  69.80

  84.08

  14.28

  20.5

  4 star/lead replacement petrol1

  March

  73.85

  82.99

  9.14

  12.4

  April

  77.83

  84.45

  6.62

  8.5

  May

  77.61

  84.04

  6.43

  8.3

  June

  77.32

  88.00

  10.68

  13.8

  Super unleaded petrol

  March

  82.24

  85.24

  3.00

  3.6

  April

  83.39

  87.18

  3.79

  4.5

  May

  83.82

  86.93

  3.11

  3.7

  1From October 1999 lead replacement petrol replaced four star

  Source:

  DTI Energy Trends

TREASURY

  Pensioners' Incomes
  Mr. Cohen
  To ask the Chancellor of the Exchequer what recent assessment his Department has made of levels of taxation on pensioners' income; and if he will make a statement. [127613]

  Miss Melanie Johnson
  Six out of 10 pensioners do not have any income tax to pay. In his 1999 Budget, the Chancellor increased the age-related personal allowances by an amount well above inflation, and in his latest 252W
  Budget maintained their value by increasing them by statutory indexation. As a result in 2000–01, someone aged 65 to 74 can have an income of £111 a week before paying tax. This Government are committed to supporting older people. We will be spending an extra £6.5 billion on pensioners in the course of this Parliament.

  Child Tax Credit
  Mr. Hancock
  To ask the Chancellor of the Exchequer how much it costs to send out the forms to taxpayers in respect of child tax credit; and if he will make a statement. [128364]

  Dawn Primarolo
  The Inland Revenue sent out claim forms in June to all PAYE taxpayers who they thought might be eligible for the Child Tax Credit. The cost of doing this is estimated to be about £1.7 million.

  Environmental Taxation
  Mr. Bruce George
  To ask the Chancellor of the Exchequer how many companies have used the mechanism which allows them to contribute 20 per cent. of their tax obligations to environmental bodies. [128318]

  Mr. Timms
  [holding answer 3 July 2000]: Operators of landfill sites who are registered for landfill tax may claim tax credits for contributions that they make to support environmental projects. There are currently 850 registered operators. Of these, 494 have made contributions representing 91 per cent. of the potential amount available as tax credits.

  Individual Savings Accounts
  Mr. Loughton
  To ask the Chancellor of the Exchequer what assessment he has made of the number of new ISA accounts opened by savers who did not previously hold(a) PEPs or (b) TESSAs. [129027]

  Miss Melanie Johnson
  [holding answer 4 July 2000]: Detailed information on each ISA opened has to be sent to the Inland Revenue by ISA managers after the end of each tax year. The information for 1999–2000 has not yet been received from all ISA managers. When all this has arrived, the Inland Revenue will be able to start the analysis which will determine how many ISA savers do not also have TESSAs and PEPs.

  Cruickshank Report
  Mr. Hawkins
  To ask the Chancellor of the Exchequer if he will make a statement on(a) the Cruickshank report on anti-fraud aspects of the future development of credit card technology and (b) representations by Europay and its members on the technical basis underlying the report. [128932]

  Miss Melanie Johnson
  [holding answer 4 July 2000]: The Government have consulted and received responses from a number of organisations about the Cruikshank report's recommendations on payment systems. While some of these have referred to fraud issues the responses have tended to focus on the broader competition issues raised in the report.

  Climate Change Levy
  Mr. Russell Brown
  To ask the Chancellor of the Exchequer what assistance he will provide for micro
  253W
  businesses that will not benefit from the reduction in National Insurance contributions to address the impact of the climate change levy. [128935]

  Mr. Timms
  [holding answer 5 July 2000]: Small and medium-sized firms stand well placed to benefit from a number of the features of the climate change levy package, notably the reduction in employers' National Insurance Contributions, the enhanced capital allowances for energy savings investments and the £50 million 'energy efficiency' fund. In particular, one of the specific aims of the £50 million 'energy efficiency' fund is to provide energy efficiency advice/audits to small and medium sized firms. Furthermore, firms that are very small consumers of energy—as set out in Schedule 6 of the Finance Bill—will be covered by the exemption for the domestic sector, and will therefore not be subject to the climate change levy.

  Petroleum Product Smuggling
  Mr. Swinney
  To ask the Chancellor of the Exchequer what is his latest estimate of revenue lost due to the(a) cross-border purchasing and (b) smuggling of road fuels in Northern Ireland; and what are his latest estimates for the volume of legitimate fuel imports from the Republic of Ireland to (i) Northern Ireland and (ii) Great Britain. [128183]

  Dawn Primarolo
  [holding answer 5 July 2000]: I refer the hon. Gentleman to the answer I gave to the hon. Member for Lewes (Mr. Baker) on 20 March 2000, Official Report, 442W.

  HM Customs and Excise do not have information on which to base estimates for the volume of commercial-scale legitimate fuel imports from the Republic of Ireland to Northern Ireland and Great Britain.

  Fuel Duty
  Mr. Swinney
  To ask the Chancellor of the Exchequer if he will publish the most recent figures for road fuel duty levels in(a) the Republic of Ireland and (b) the United Kingdom, in sterling; and if he will estimate the additional duty for (i) a motorist to fill a tank of petrol in an average car and (ii) a haulier to fill a tank of diesel in an average lorry in (1) Northern Ireland and (2) the Republic of Ireland. [128184]

  Mr. Timms
  [holding answer 5 July 2000]: The rates of excise duty for the United Kingdom and the Republic of Ireland are published in the European Commission's Oils Bulletin, which is kept in the House of Commons Library.

  Financial Service Authority
  Mrs. Lawrence
  To ask the Chancellor of the Exchequer when he expects the annual report of the Financial Services Authority to be published. [129789]

  Miss Melanie Johnson
  A copy of the Board's report was laid before Parliament today. It includes a report, pursuant to Section 1(3) of the Banking Act 1987, on the exercise of the Authority's functions under that Act, during the period 1 April 1999 to 31 March 2000. It also includes the report made by the FSA under section 117 of 254W
  the Financial Services Act 1986, covering the period 1 April 1999 to 31 March 2000. Copies are available in the Library of the House.

  Knowledge Economy
  Mr. Matthew Taylor
  To ask the Chancellor of the Exchequer, pursuant to his answer of 19 June 2000,Official Report, column 106W, on the knowledge economy, if he will list representations that he has received during the course of the review; and if he will make a statement. [129279]

  Mr. Andrew Smith
  The representations received during the course of the review from external organisations and individuals were provided in confidence.

  Aggregates Tax
  Mrs. Ray Michie
  To ask the Chancellor of the Exchequer what consultations he has had with Scottish industry concerning the implementation of the aggregates tax in 2002; and if he will make a statement. [129042]

  Mr. Timms
  The Government have developed the aggregates levy in an open and consultative way. HM Customs and Excise issued a consultation document in June 1998, which invited views from industry and other parties with a potential interest on the practical issues that would arise from a levy on aggregates. Draft legislation for the levy was then published for consultation on 30 April 1999.

  During this process, the Government have received a number of representations from Scottish business, and these have been taken account of in the design of the levy.

  Mrs. Ray Michie
  To ask the Chancellor of the Exchequer what assessment he has made of the impact of the proposed aggregates tax on Scottish industry; and if he will make statement. [129040]

  Mr. Timms
  The aggregates levy will bring about environmental benefits by making the price of aggregates better reflect their true environmental costs. This will provide an incentive for all business to use more recycled aggregates and to use all aggregates more efficiently.

  All of the revenues raised will be recycled back through a cut in employer NICs and a new "Sustainability Fund" aimed at delivering local environmental benefits. It is not possible to say precisely what the effect will be on Scottish industry, since this will depend, among other things, on the degree to which firms switch to recycled materials.

  Quarrying (Scotland)
  Mrs. Ray Michie
  To ask the Chancellor of the Exchequer if he will make a statement on the implementation of the new Quarrying Sustainability Fund in Scotland. [129041]

  Mr. Timms
  The Government will be consulting all interested parties shortly on how the new Sustainability Fund can best be used to deliver local environmental improvements.

  No decisions have yet been made on the form or size of the Fund.

NORTHERN IRELAND

  Terrorist Violence
  Mr. William Ross
  To ask the Secretary of State for Northern Ireland if he will list for each week since 1 January the number of(a) punishment beatings, (b) punishment shootings and (c) murders in Northern

  Security situation statistics—1 January 2000–28 June 2000

  Casualties as a result of paramilitary style shootings

  Casualties as a result of paramilitary style assaults

  Security situation related murders

  Year

  By Loyalist

  By Republican

  By Loyalist

  By Republican

  By Loyalist

  By Republican

  1–8 January 2000

  1

  —

  2

  —

  —

  —

  9–15 January 2000

  —

  —

  3

  —

  1

  —

  16–22 January 2000

  2

  —

  —

  —

  —

  —

  23–29 January 2000

  —

  —

  2

  1

  —

  —

  30 January–5 February 2000

  1

  —

  4

  1

  —

  —

  6–12 February 2000

  1

  —

  —

  —

  —

  —

  13–19 February 2000

  —

  —

  2

  1

  2

  —

  20–26 February 2000

  1

  —

  —

  1

  —

  —

  27 February–4 March 2000

  4

  —

  1

  —

  —

  —

  5–11 March 2000

  1

  2

  1

  1

  —

  —

  12–18 March 2000

  4

  3

  1

  1

  —

  —

  19–25 March 2000

  1

  —

  2

  1

  —

  —

  26 March–1 April 2000

  2

  2

  3

  1

  —

  —

  2–8 April 2000

  —

  3

  1

  3

  —

  —

  9–15 April 2000

  —

  4

  —

  —

  —

  —

  16–22 April 2000

  —

  1

  —

  1

  —

  —

  23–29 April 2000

  5

  —

  2

  3

  —

  —

  30 April–6 May 2000

  4

  4

  2

  —

  —

  —

  7–13 May 2000

  4

  —

  2

  5

  —

  —

  14–20 May 2000

  1

  —

  2

  2

  —

  —

  21–27 May 2000

  1

  1

  —

  1

  1

  —

  28 May–3 June 2000

  —

  1

  2

  —

  1

  —

  4–10 June 2000

  —

  —

  —

  1

  —

  —

  11–17 June 2000

  3

  —

  4

  1

  —

  —

  18–23 June 2000

  2

  1

  —

  2

  —

  —

  25–28 June 2000

  1

  1

  1

  —

  —

  —

  PFI Contracts
  Mr. Alan Williams
  To ask the Secretary of State for Northern Ireland if he will list the PFI contracts entered into by his Department prior to 30 May, indicating(a) their dates of commencement, (b) their value, (c) if they have been subject to refinancing and (d) if his Department has a claw-back entitlement to share in savings arising from refinancing. [129061]

  Mr. Mandelson
  The Northern Ireland Office has never entered into any PFI contracts.

ENVIRONMENT, TRANSPORT AND THE REGIONS

  GM Crops
  Mr. Yeo
  To ask the Secretary of State for the Environment, Transport and the Regions when the Government first consulted English Nature about the contamination by GMOs of rape seed. [123834]

  Mr. Meacher
  [holding answer 25 May 2000]: The Government have not formally consulted English Nature about the planting of oil seed rape containing 1 per cent. GM material. However, English Nature is aware of the facts and has been in contact with my officials since
  256W
  Ireland, indicating the number in each category attributable to (i) Republican terrorist organisations and (ii) Loyalist terrorist organisations. [128616]

  Mr. Ingram
  The table shows the number of casualties resulting from paramilitary-style attacks for the period 1 January to 28 June 2000. The figures may be subject to amendment.

  18 May. English Nature has stated publicly in a press notice of 22 May 2000 that there is no immediate risk to wildlife from the contaminated rapeseed.

  English Nature is also an assessor on the Advisory Committee on Releases to the Environment (ACRE) and was party to the ACRE meeting on 25 May where members discussed this matter in full and further endorsed their recent advice.

  Crop Contamination
  Mr. Alan Simpson
  To ask the Secretary of State for the Environment, Transport and the Regions if he will publish advice given to him by English Nature on the GM contamination of Advanta Seeds UK's Hyola spring oilseed rape. [124325]

  Mr. Meacher
  English Nature has not given formal advice on this matter. English Nature published a press notice of 22 May 2000, stating that there is no immediate risk to wildlife from the contaminated rapeseed. A copy has been placed in the House Library.

  Incineration
  Mr. Pickthall
  To ask the Secretary of State for the Environment, Transport and the Regions what plans
  257W
  the Government have to introduce independent and comprehensive testing of incinerator emissions and ash. [126471]

  Mr. Meacher
  [holding answer 20 June 2000]: Incinerator emissions are already tightly regulated. Under the provisions of Part I the Environmental Protection Act 1990, regulators (for England and Wales, either the Environment Agency for larger plant and all hazardous waste incinerators, or local authorities for other plant) must include in an incineration plant's permit conditions to deliver BAT/BATNEEC (Best Available Techniques Not Entailing Excessive Cost). Guidance is published on what constitutes BATNEEC. The regulators have powers to require independent emissions testing where they consider it warranted.

  Data on levels of dioxins in ash sent for disposal are not routinely held by the Agency or my Department. The operators of incineration plant are required by section 34 of the Environmental Protection Act 1990 to provide sufficient information to those managing waste ash to ensure that it is disposed of appropriately, for example chemical and physical information. They are also required to ensure that ashes which contain hazardous substances above certain thresholds are disposed of in accordance with the Special Waste Regulations 1996 (as amended). Environment Agency powers enable it to monitor the operation of these controls. We have no plans at present to introduce further requirements for testing ash sent for disposal.

  The Environment Agency requires that site-specific authorisation be sought for the use of ash in unbound construction applications and for ashes which have not been 'characterised' on the basis of various chemical properties. Where used in a construction application the processed ashes will normally be required to meet relevant technical specifications. We understand that the industry is working towards a quality control procedure to ensure that the ash consistently meets the 'fit for purpose' criteria required by these technical specifications. DETR, the Environment Agency and industry representative organisations are also developing a policy protocol for the use of Incineration Bottom Ash (IBA) in construction applications. A draft is currently under review. It will also require the 'characterisation' of ash for various chemical properties which, according to best practice, would be carried out in accordance with a robust quality control procedure.

  The proposed waste incineration Directive (Common Position (EC) No 7/2000), which the Government have welcomed and which is now in the last stages of negotiations, will apply to virtually all types of incineration and co-incineration plant. It sets stringent standards for emissions to air and water, places controls on solid residues, and includes monitoring requirements for air and water emissions. Article 9 of the proposal also says:
  "Prior to determining the routes for the disposal or recycling of the residues from incineration and co-incineration plants, appropriate tests shall be carried out to establish the physical and chemical characteristics and the polluting potential of the different incineration residues."
  Similar wording is already included in Article 9(4) of the hazardous waste incineration Directive (94/67/EC). Subject to the remaining stages of negotiations, the proposed Directive is likely to apply to new plant from Autumn 2002 and to existing plant from Autumn 2005.

  Bus Drivers
  Mr. Sanders
  To ask the Secretary of State for the Environment, Transport and the Regions (1) what assessment he has made of the extent of shortages of bus drivers; and if he will make a statement; [128447]

  (2) if he will make it his policy to offer financial incentives to bus companies facing recruitment difficulties for the training of bus drivers. [128446]

  Mr. Hill
  My Department is aware of the difficulties being experienced by bus operators in recruiting and retaining bus drivers in some areas. The bus industry has drawn our attention to this issue, which has also been a matter considered as part of the Department's research on trends in the industry.

  The responsibility for ensuring that they have sufficient drivers is primarily a matter for individual bus companies. However, my Department and the Driver and Vehicle Licensing Agency are pursuing with the industry what steps can be taken to assist with the current problems.

  In addition, I understand the Department for Education and Employment has provided £145,000 to TRANSfED, the bus industry's National Training Organisation, to identify and address future skills needs.

  Single Regeneration Funding
  Miss Geraldine Smith
  To ask the Secretary of State for the Environment, Transport and the Regions if he will list the council wards in Morecambe and Lunesdale that are eligible for single regeneration funding. [128341]

  Ms Beverley Hughes
  I refer my hon. Friend to the answer I gave on 29 June 2000,Official Report, column 604W.

  Heathrow
  Dr. Cable
  To ask the Secretary of State for the Environment, Transport and the Regions what proposals are under consideration by his Department for additional runways at Heathrow; and what is the status of these proposals. [128869]

  Mr. Mullin
  As the then Minister for Transport announced on 11 March 1999,Official Report, columns 360–61W, the South East and East of England Regional Air Services (SERAS) study will examine a wide range of options and has started from the position that nothing is ruled in and nothing is ruled out.

  Options will be appraised through a process of successive sifts. A very large number of options will be considered during the sifting process, which is designed to reduce the options to a manageable number, so that those can be appraised in sufficient detail to support a meaningful public consultation at the end of the study.

  Until then, it would be premature to comment on the scope or status of any option.

  Local Authority Housing
  Mr. Love
  To ask the Secretary of State for the Environment, Transport and the Regions what plans he has to introduce a performance target for tackling the backlog of repairs in the local authority sector; and if he will make a statement. [128903]
  259W
  Mr. Raynsford
  The Housing Green Paper issued in April sets out a range of proposals for tackling housing problems, including our commitment to ensure that all social housing is of a decent standard within 10 years. The Department's Public Service Agreement (PSA) target on the council house repairs backlog agreed in the 1998 Comprehensive Spending Review is to deliver a reduction of 10 per cent. in the backlog by April 2002. Any further targets will be announced following the current spending review.

  Mr. Pound
  To ask the Secretary of State for the Environment, Transport and the Regions what assessment he has made of the impact of the proposed council housing stock transfer programme for 2000–01 on the rents of(a) existing tenants and (b) future tenants; and if he will make a statement. [129065]

  Mr. Raynsford
  The table shows(a) the transfer rents of existing tenants and (b) the relet rents of new tenants for local authorities who have places on the 2000–01 housing stock transfer programme. These rents are guaranteed to rise by not more than RPI plus 1 per cent. for five years after transfer under the new landlord. We would expect rent increases to be kept below this level wherever possible. We have also set out in the Housing Green Paper, our proposals for achieving rent harmonisation over the next 10 years.

  Birmingham CC and Sunderland CC have yet to be formally accepted onto the programme.

  Weekly Rents at Transfer

  (a) Existing tenants

  (b) New tenants

  Barnsley MBC

  32.33

  35.56

  Blackburn with Darwen BC

  49.69

  49.69

  Birmingham CC

  44.10

  51.60

  Calderdale Metropolitan BC

  37.06

  44.48

  Chester CC

  40.48

  50.60

  Chichester DC

  52.92

  61.23

  Coventry CC

  39.17

  47.00

  East Northamptonshire DC

  40.00

  50.00

  East Staffordshire BC

  38.75

  44.56

  Fylde BC

  37.08

  48.19

  Horsham DC

  59.00

  64.90

  Manchester CC—Handforth Estate

  43.30

  49.80

  Manchester CC—Knutsford Estate

  45.90

  50.50

  Mendip DC

  44.80

  49.29

  LB Richmond

  62.83

  68.62

  South Bedfordshire DC

  48.83

  53.71

  Staffordshire Moorlands DC

  39.31

  47.17

  Sunderland CC

  42.73

  49.13

  Torbay Council

  46.94

  54.23

  Walsall MBC

  39.54

  44.35

  Waverley BC

  59.85

  68.83

  West Oxfordshire DC

  47.25

  51.98

  West Wiltshire DC

  52.87

  60.79

  Wgycombe DC

  52.44

  57.44

  1Weekly rent figures are based on 52 weeks

  Affordable Housing
  Mr. Love
  To ask the Secretary of State for the Environment, Transport and the Regions what representations he has received on setting targets for affordable housing in regional planning guidance; and if he will make a statement. [128908]

  Mr. Raynsford
  The Secretary of State published his proposed changes to the South East and East of England draft Regional Planning Guidance in March this year. The 260W
  consultation period finished on 19 June and the responses are still being analysed. Over 500 representations have been analysed as of 3 July. Of these some 100 have pressed for targets for affordable housing in regional planning guidance. However, this Government have made it clear that assessments of local housing needs are matters for local authorities to undertake in light of their local circumstances.

  Mr. Love
  To ask the Secretary of State for the Environment, Transport and the Regions what estimate he has made of the current unmet need for affordable housing in(a) London and (b) England; and if he will make a statement. [128902]

  Mr. Raynsford
  While the Government have from time to time commissioned studies of the extent and nature of housing need to inform their views on the requirement for affordable housing in England, they believe that neither national nor regional estimates can adequately reflect the wide diversity of needs and priorities which exist at the local level. For these reasons, the Government believe that local authorities are best placed to carry out robust assessments of housing need in their areas.

  Mr. Pound
  To ask the Secretary of State for the Environment, Transport and the Regions if he will (1) give local authorities greater discretion to secure affordable housing on sites for developments below the thresholds currently set out in Circular 6/96; and if he will make a statement; [129062]

  (2) revise Circular 6/98 to reduce the threshold above which an affordable housing element can be secured through the planning system in (a) inner and (b) outer London; and if he will make a statement. [129064]

  Mr. Raynsford
  The thresholds were in fact reduced by Circular 6/98. We have recently issued Planning Policy Guidance Note 3: Housing (PPG3) which reaffirms the detailed policy guidance on affordable housing in Circular 6/98 including the flexibility to facilitate lower thresholds in areas of special need outside Inner London. We have no plans at present to revise the guidance.

  Mr. Pound
  To ask the Secretary of State for the Environment, Transport and the Regions what recent representations he has received on reducing the threshold set out in Circular 6/98 for securing affordable housing through the planning system; and if he will make a statement. [129067]

  Mr. Raynsford
  We received a number of representations about affordable housing in response to the consultation draft of revised Planning Policy Guidance note 3: Housing. Of these, 23 raised the question of the thresholds set out in Circular 6/98.

  Starter Home Initiative
  Mr. Love
  To ask the Secretary of State for the Environment, Transport and the Regions what his definition of a key worker is for the purposes of the Starter Home Initiative described in the Housing Green Paper; and if he will make a statement. [128901]

  Mr. Raynsford
  The Housing Green Paper made clear that the Government were looking for proposals on how the Starter Home Initiative could be operated most successfully and cost effectively, and that we would
  261W
  announce details of the initiative in the light of responses to the Green Paper and the Spending Review. The announcement will cover, inter alia, how a key worker might be defined.

  Housing Rents
  Mr. Pound
  To ask the Secretary of State for the Environment, Transport and the Regions if he will provide a breakdown by registered social landlord of the average rent paid by(a) existing tenants and (b) new tenants where large-scale voluntary transfers have taken place in each of the three years following transfer. [129066]

  Mr. Raynsford
  Information on average rents is collected by the Housing Corporation as part of their Regulatory Statistical Returns but information on average rents paid by transfer tenants and by new tenants is not collected separately. The Government have set out their proposals for rent harmonisation in the Housing Green Paper, "Quality and Choice: a decent home for all".

  M42 Motorway Service Area Development
  Mr. John M. Taylor
  To ask the Secretary of State for the Environment, Transport and the Regions when a decision will be announced on the three motorway service area development applications on the M42 in Solihull. [128876]

  Ms Beverley Hughes
  The Government have set a target for deciding 80 per cent. of planning appeals within eight weeks of receipt of the Inspector's report following the local inquiry. The inquiry into the appeals closed in June, and the Inspector has not yet submitted his report to the Secretary of State. At the inquiry the Inspector indicated his intention to submit his report by September.

  European Habitats Directive
  Ms Walley
  To ask the Secretary of State for the Environment, Transport and the Regions if he will make a statement on progress in the implementation of the European Habitats Directive. [128733]

  Mr. Meacher
  Last year, the Government submitted a list of 340 UK sites as candidate Special Areas of Conservation under the Habitats Directive. The UK site list was, like those of other member states, criticised as inadequate by the European Commission in the autumn of last year. As a result, the country nature conservation agencies, co-ordinated by the Joint Nature Conservation Committee, have conducted a fundamental review of site selection. The advice arising from that review is currently being considered and I hope to be able to make an announcement on a revised site list soon.

  Housing (Capital Improvements)
  Mr. Corbyn
  To ask the Secretary of State for the Environment, Transport and the Regions what the current year's investment is, for each London borough, per property, of capital improvements to(a) council and (b) housing association properties; and if he will make a statement. [129120]
  262W
  Mr. Raynsford
  [holding answer 5 July 2000]: The latest available outturn data for Registered social landlords (RSLs) relate to 1999–2000, and for local authorities to 1998–99. Figures for local authorities in 1999–2000 will become available in the autumn.

  Figures for planned expenditure on existing stock by RSLs based on Approved Development Programme (ADP) allocations for 2000–01 are also available. Local authorities reported their planned spend for 2000–01 on the HIP Annual Plan returns last summer but these plans were drawn up before HIP allocations for the year had been decided.

  Contaminated Brownfield Sites
  Mr. Steen
  To ask the Secretary of State for the Environment, Transport and the Regions if he will challenge the European Commission ruling that member state grants to clear contaminated brownfield land violate EU regulations. [128399]

  Ms Beverley Hughes
  We have accepted the European Commission's ruling of 22 December 1999 that the Partnership Investment Programme breached the state aid rules, and closed the programme from that date. We are discussing with the Commission possible ways forward on joint public/private partnership working in regeneration.

  Mr. Steen
  To ask the Secretary of State for the Environment, Transport and the Regions what percentage of brownfield sites in(a) England, (b) the South West and (c) Devon are classified by his Department as suffering from contamination preventing redevelopment. [128562]

  Ms Beverley Hughes
  Sites are not classified in the manner suggested. The potential impact of contamination on any development will depend significantly on the nature and design of the specific development. For example, a site which is "suitable" for development for commercial and retail uses may not be "suitable" for residential use without prior remediation.

  Mr. Steen
  To ask the Secretary of State for the Environment, Transport and the Regions how many contaminated brownfield sites identified for development(a) qualify for Government grants to aid decontamination and (b) will be affected by the European Commission's ruling on state aid for decontamination. [128563]

  Ms Beverley Hughes
  Under the former Partnership Investment Programme, it was the specific development proposal for any given site which may have been eligible for support, not the site itself. Data are not available in the form requested, as sites were not classified as eligible for funding support.

  Dartford River Crossings
  Mr. Geraint Davies
  To ask the Secretary of State for the Environment, Transport and the Regions if he will make a statement about his plans for charging at the Dartford river crossings. [129910]

  Mr. Hill
  The current legislation authorising the collection of tolls at the Dartford river crossings is forecast to expire in June 2002. The cessation of tolling would be likely to have the effect of significantly increasing demand on the eastern sector of the M25 which would further
  263W
  increase the level of congestion at the crossings and elsewhere and have associated environmental and safety implications.

  The Government are therefore minded to continue to charge for the use of the Dartford river crossings when the current legislation expires. Subject to the consent of Parliament we will consult next year on detailed proposals. Revenues from charging would be hypothecated for spending on transport.

  Flooding
  Mr. Derek Foster
  To ask the Secretary of State for the Environment, Transport and the Regions if he will provide financial assistance to Wear Valley District Council under the Bellwin Scheme in respect of costs incurred following flooding in the district on the weekend of 3 and 4 June. [129913]

  Ms Beverley Hughes
  I am satisfied that financial assistance under the Bellwin scheme is justified in the case of Wear Valley District Council given the exceptional nature of the flooding and the damage caused. A scheme will, therefore, be established under section 155 of the Local Government and Housing Act 1989. Grant will be paid to the authority to cover 85 per cent. of the eligible costs above a threshold, which it has incurred in dealing with the flooding.

AGRICULTURE, FISHERIES AND FOOD

  GM Contamination
  Mr. Campbell-Savours
  To ask the Minister of Agriculture, Fisheries and Food what action he is taking to check if United Kingdom crops have been affected by GM contamination of French maize crops. [129915]

  Mr. Nick Brown
  Following reports in the French press last week that the French authorities had discovered low levels of GM presence in conventional maize seed imported into France, we contacted the French authorities, who confirmed on 30 June that they had indeed found some GM seed in conventional maize seed, which has been sown in South West France. Further information now indicates that they have found three different modifications in a number of varieties of forage maize imported into France by the company Golden Harvest. The French authorities have not yet confirmed which varieties of maize seed are involved, but have confirmed that sweetcorn varieties are not affected by their current investigations. We are seeking further information from them on the varieties concerned. However, as the varieties concerned are cultivated in Southern France, it is possible that they would be unsuitable for cultivation in UK conditions.

  The GMs found in maize samples by the French authorities are BT 176 and BT 11, and one further, as yet unidentified, modification. BT 176 is insect resistant and has Part C consent within the EU under Directive 90/220 for import, food and feed use, and for cultivation. BT 11 is insect resistant and has Part C consent for import and use in animal feed. Pending further information from the French authorities, my Department, the Department of the Environment, Transport and the Regions and the Food
  264W
  Standards Agency are considering what the implications would be should further investigations indicate that affected seed may have been sown in the UK.

SOLICITOR-GENERAL

  Departmental Vehicles
  Mr. Pearson
  To ask the Solicitor-General if he will list for his Department and its agencies the approved list of manufacturers of(a) cars and (b) commercial vehicles; and if he will make a statement on his Department's leasing and purchasing policy. [128992]

  The Solicitor-General
  The Legal Secretariat to the Law Officers and the Treasury Solicitor's Department make use of cars provided by the Government Car Service. I understand that the Cabinet Office will shortly give details of cars leased and purchased by the Government Car Service to my hon. Friend in a written answer.

  The Crown Prosecution Service has a car and van leasing scheme. There is no purchase scheme. Under the leasing scheme, there are four approved manufacturers: Ford, Peugeot, Rover and Vauxhall. The Crown Prosecution Service ensures good value for money from its leasing scheme by seeking Competitive quotations for all new leases and, to take account of environmental considerations, there are limits on the size of engine capacities for leased vehicles.

  The Serious Fraud Office neither leases nor has purchased cars or commercial vehicles, though it keeps this position under review.

  Private Finance Initiative
  Mr. Alan Williams
  To ask the Solicitor-General if he will list the PFI contracts entered into by the Law Officers' Department, indicating(a) their dates of commencement, (b) their value, (c) if they have been subject to refinancing and (d) if his Department has a claw-back entitlement to share in savings arising from refinancing. [129053]

  The Solicitor-General
  The Legal Secretariat to the Law Officers have not entered into any PFI contract.

  Alton Manning
  Mr. Cohen
  To ask the Solicitor-General if he will make a statement on the action he will take following the High Court ruling in respect of the Crown Prosecution Service's decision not to prosecute officers involved in the death of Alton Manning in Blakenhurst private prison. [129095]

  The Solicitor-General
  Judgment in this case was handed down on 17 May 2000 when the CPS decision not to prosecute was quashed and the matter was referred back to the CPS to reconsider the decision. The avenue of appeal is to the House of Lords. No appeal is possible unless the Divisional Court certifies that its decision involves a point of law of general public importance and unless leave to appeal is given by either the Divisional Court or the House of Lords. The relevant legislation provides 14 days within which to make an application to the Divisional Court for such certification and leave. The CPS made such an application within the 14-day limit.

DEFENCE

  Trees
  Mr. Norman
  To ask the Secretary of State for Defence what his Department's policy is on the country of origin of trees planted on its land and that of its agencies. [124633]

  Mr. Spellar
  Conservation is a key element in the Ministry of Defence's stewardship of its woodland and the Defence Estates Agency employs full-time professional foresters who manage this process on Ministry of Defence land. Woodland planning includes a study of the local habitat, the soil and the environmental impact of any planting. Wherever possible, species indigenous to the soil are planted, often using seeds collected on the Defence estate.

  Reservists
  Dr. Cable
  To ask the Secretary of State for Defence how many reservists are currently serving with regular forces as mobilised soldiers; and in each of the last five years what was the total number of(a) regular forces, (b) reservists and (c) reservists serving with regular forces as mobilised soldiers. [126202]

  Mr. Spellar
  The total number of reservists currently serving as mobilised soldiers is 649. (This figure consists of members of the Army Reserve and Territorial Army)

  Total number of regular forces for each of the last five years

  Year

  Number

  1995

  233,340

  1996

  221,870

  1997

  210,823

  1998

  210,136

  1999

  208,636

  Total number of reservists1for each of the last five years

  Year

  Number

  1995

  348,956

  1996

  320,636

  1997

  321,977

  1998

  317,070

  1999

  306,440

  1The total number of reservists consists of members of: the Royal Fleet Reserve, the Royal Naval Reserve, the Royal Marine Reserve, the Army Reserve, the Territorial Army, the Air Force Reserve and the Royal Auxiliary Air Force

  Number of reservists serving as mobilised soldiers in each of the last five years

  Year

  Number

  1995

  1441

  1996

  1,416

  1997

  973

  1998

  756

  1999

  1,177

  1Records start at the first call-up to Bosnia in December 1995. Figures for the rest of 1995 are not held centrally and could be provided only at disproportionate cost

  Note:

  The figures include members of the Territorial Army and Army Reserve
  266W
  Mr. Viggers
  To ask the Secretary of State for Defence if he will give the detailed costs and benefits of the Royal Naval Reserve utilising reservists as Sea Harrier pilots, with particular reference to(a) the costs of the reservist pilot programme and (b) improved aircraft utilisation. [129282]

  Mr. Spellar
  The Air Branch of the RNR has 13 trained Sea Harrier pilots. All of them are former regular RN Sea Harrier pilots.

  Their RNR function is to maintain a close familiarity with current military fast jet operations so that, in the event of call-out, it would take a minimum period of training to bring them up to operational standard and permit them to be deployed alongside, or in support of, their RN counterparts.

  The minimum annual training requirement which these pilots are required to achieve is 17 Operational Role Training days. In the period April 1999 to March 2000 they averaged 25 training days. The training is designed to maintain otherwise perishable skills. The cost of 25 days' training, in current individual pilot salary terms, is £2,778.

  With regard to the benefits of aircraft utilisation, in recent years one, but very often two, such pilots have at any time been serving in support of Sea Harrier pilot training. Every opportunity is taken to recall these pilots—when their civilian jobs allow—as a very cost-effective way of supporting the Regular forces and ensuring maximum usage of Sea Harrier aircraft.

  Clyde Naval Base
  Mr. Welsh
  To ask the Secretary of State for Defence if he will make a statement on his long-term plans for the Clyde Naval Base, with special reference to the likely impact on the numbers employed there. [128073]

  Mr. Spellar
  The Defence Logistics Organisation has challenging targets to reduce costs while improving the quality of logistics support to the Front Line. As part of this, discussions are being held with the Dockyard companies and senior Trades Union national officers on the problem of over-capacity in warship support within the Dockyards and Naval Bases, including Clyde. The discussions are not aimed at closing any Dockyards or Naval Bases.

  It is too early to say what the outcome of these discussions will be in terms of numbers employed.

  Belize
  Mr. Key
  To ask the Secretary of State for Defence what British forces are stationed in Belize; and if he has any plans to increase their number. [129077]

  Mr. Spellar
  The British Army Training Support Unit Belize (BATSUB) is the only unit permanently stationed in Belize and consists of 84 British military personnel. There are no plans to increase this number.

  Mr. Key
  To ask the Secretary of State for Defence what recent representations he has received from the Belize Government regarding military assistance; and if he will make a statement. [129079]
  267W
  Mr. Spellar
  My right hon. Friend the Secretary of State for Defence and I, as well as other Ministers including my right hon. Friend the Foreign and Commonwealth Secretary, met Said Musa, the Prime Minister of Belize, during his recent visit to the United Kingdom. During our meeting we discussed the strong defence relationship between our two countries, and current levels of military assistance funding provided by the UK to Belize. Her Majesty's Government are giving further consideration to representations from Mr. Musa on this subject. I also took the opportunity to express our thanks to Mr. Musa for his country's continuing support for the British Army jungle training unit in Belize, BATSUB.

  MLRS
  Mr. Key
  To ask the Secretary of State for Defence what the Army's inventory is of MLRS; and how many are operationally available. [129123]

  Mr. Spellar
  The Army has 64 Multiple Launch Rocket Systems (MLRS) including one non-operational training equipment. Three systems are currently in storage or repair. As at 31 May 2000, the latest date for which information is available, 77 per cent. of systems were immediately available for operations increasing to 90 per cent. within 24 hours.

  British Forces Post Office
  Mr. Dismore
  To ask the Secretary of State for Defence when he expects to make an announcement about the future of British Forces Post Office, Mill Hill. [129277]

  Mr. Spellar
  A study is currently being conducted into the future structure and location of the British Forces Post Office, whose headquarters is at Inglis Barracks, Mill Hill. I expect to receive advice in the autumn of this year and announce my decision soon after.

EDUCATION AND EMPLOYMENT

  Employment Zones
  Jane Griffiths
  To ask the Secretary of State for Education and Employment what the function is of the personal job account in the operation of employment zones. [127935]

  Ms Jowell
  The Personal Job Account is a radical and practical way of helping long-term unemployed people into work. Existing funds have been drawn together to make up the Personal Job Account, namely funds for Employment Service Support, training and benefits payments. There is no upper or lower limit to the amount allocated; it is dependent upon the needs of that participant and their most effective route back into work.

  Nursery Education
  Mr. Pike
  To ask the Secretary of State for Education and Employment what further steps his Department proposes to take to extend the provision of nursery education. [127936]
  268W
  Ms Hodge
  Since September 1998, all four-year-olds have had access to a free nursery education place. By April 2002, we shall have created 190,000 new free places for three-year-olds. 66 per cent. will then have access to such a place.

  In line with our Manifesto pledge, we shall announce in this Parliament the date by which we shall achieve universal provision for three-year-olds.

  Older People
  Mr. Sarwar
  To ask the Secretary of State for Education and Employment if he will make a statement on the impact of the Government's employment policies for older people. [127937]

  Ms Jowell
  We are making progress in this area. The Code of Practice on Age Diversity in Employment, launched last year, has been widely welcomed. In the first two months since the national launch of New Deal 50 Plus, over 4,000 older people have returned to work and drawn on the Employment Credit. We are evaluating the impact of these initiatives. Overall, employment levels of older people rose by 2.4 per cent. and unemployment fell by 13.3 per cent. since last year.

  Aptitude Testing
  Dr. Julian Lewis
  To ask the Secretary of State for Education and Employment if he will make a statement on his policy on the testing of aptitude in schools. [127938]

  Jacqui Smith
  Our policy is set out in the School Standards and Framework Act 1998 which allows schools with a specialism in designated subjects to give priority to up to 10 per cent. of pupils on the basis of aptitude for those subjects.

  Small Schools
  Mrs. Mahon
  To ask the Secretary of State for Education and Employment if he will make a statement on the small school support fund. [127940]

  Ms Hodge
  I refer my hon. Friend to the oral answer I gave today,Official Report, column 270W to my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham).

  Numeracy
  Mr. Kidney
  To ask the Secretary of State for Education and Employment what support his Department is continuing to give to schools for the teaching of numeracy skills. [127941]

  Jacqui Smith
  The National Numeracy Strategy began in primary schools last September, supported by a training programme for all schools. We are continuing to fund over 370 local numeracy consultants to provide a wide range of intensive support and training to those schools in most need. This year, 27,000 teachers will attend our highly successful five-day intensive training course.

  Modern Apprenticeships
  Ms Dari Taylor
  To ask the Secretary of State for Education and Employment what plans he has to raise standards in foundation and advanced modern apprenticeships. [127943]
  269W
  Mr. Ben Chapman
  To ask the Secretary of State for Education and Employment what plans he has to raise standards in foundation and advanced modern apprenticeships. [128723]

  Mr. Wicks
  The Government are committed to an apprenticeship culture which meets the needs of the individual in a learning environment, offers greater opportunities for progression and secures higher standards. My right hon. Friend the Secretary of State launched a consultation exercise on 27 June on implementing reforms to strengthen Modern Apprenticeships. The consultation document is available in the House Library.

  Physical Education
  Dr. Naysmith
  To ask the Secretary of State for Education and Employment what provision he is making for the teaching of physical education in courses of initial teacher training. [127944]

  Ms Estelle Morris
  We recognise the need to ensure that initial teacher training (ITT) equips trainees with the confidence and skills they need to deliver a broad and balanced curriculum in all the foundation subjects, including PE. We are addressing issues in relation to PE and sport through our wider reforms to improve the quality and flexibility of ITT provision. The Teacher Training Agency is also addressing training in PE and sport as part of its review of the ITT Curriculum and Qualified Teacher Status Standards in DfEE Circular 4/98 "Requirements for Courses of Initial Teacher Training".

  Regional Development Agencies
  Mr. Loughton
  To ask the Secretary of State for Education and Employment if he will make a statement on the educational responsibilities of the regional development agencies. [127945]

  Mr. Wills
  The Government set up Regional Development Agencies to improve the economies of the English regions. They have a broad statutory responsibility to enhance the development and application of skills in their area. In addition to producing a Regional Economic Strategy, one of their key tasks is to develop with their partners a plan containing actions to improve the regional skills base.

  Child Care Workers
  Mr. Bill O'Brien
  To ask the Secretary of State for Education and Employment what steps have been taken to encourage the recruitment of child care workers. [127947]

  Ms Hodge
  The Government launched earlier this month a National Recruitment Campaign to help raise the status of the early years, childcare and playwork sector and recruit the new workers needed to staff expanding services. The campaign will help support the work of Early Years Development and Childcare Partnerships (EYDCPs), which are implementing strategies for recruiting workers in their area. An extra £5 million has been made available to the EYDCPs this year to help.

  Internet
  Mr. Savidge
  To ask the Secretary of State for Education and Employment what progress has been made in connecting schools to the internet over the last three years. [127948]

  Mr. Wills
  Excellent progress is being made under the National Grid for Learning programme in connecting schools to the Internet. The 1999 Survey of Information and Communications Technology in Schools indicated a significant increase in connectivity in primary schools from 3 per cent. in 1996 to 62 per cent. in March 1999 and in secondary schools from 42 per cent. to 93 per cent. over the same period.

  Foundation Degrees
  Caroline Flint
  To ask the Secretary of State for Education and Employment if he will make a statement on his plans for foundation degrees. [127950]

  Mr. Wicks
  Following the launch of the proposals for the Foundation Degree in February this year, we established a Foundation Degree Group, comprising all the key stakeholders and including significant employer representation. The work of the Group has informed the prospectus inviting bids from consortia to design and develop the prototype Foundation Degree programmes, which will be issued this month by the Higher Education Funding Council for England. We expect the prototype courses to be delivered from autumn 2001 with further expansion taking place gradually.

  New Deal
  Mr. John Smith
  To ask the Secretary of State for Education and Employment what estimate he has made of the proportion of people on the New Deal schemes who gain permanent employment on leaving. [127951]

  Ms Jowell
  Statistics are not collected using a category of "permanent" as this is not a term that adequately describes the realities of the modern labour market. By the end of March 2000, 57 per cent. of leavers to known destinations from the New Deal for Young People and 17 per cent. of leavers to known destinations from the New Deal for long term unemployed adults aged 25 or over, found sustained unsubsidised employment (i.e. a job that lasted for 13 weeks or more).

  External Examiners
  Dr. Gibson
  To ask the Secretary of State for Education and Employment what progress he has made on standardising the work of external examiners in the higher education sector. [127952]

  Mr. Wicks
  External examiners are a matter for the higher education sector itself and I have nothing further to add to the replies I gave on 20 January 2000,Official Report, column 542W and 9 February 2000, Official Report, column 183W.

  Class Sizes
  Helen Jackson
  To ask the Secretary of State for Education and Employment what progress he is making on reducing class sizes in primary schools. [127953]
  271W
  Ms Estelle Morris
  After rising for the previous 10 years, the size of the average class in primary schools has fallen from 27.7 in January 1998 to 27.1 in January 2000. Over the same period, the size of the average class in primary schools in the Sheffield, Hillsborough parliamentary constituency has fallen from 28.2 to 28.1.

  We are well on course to deliver our pledge to limit infant classes to 30 pupils. We have since January 1998 already reduced the number of children in infant classes of over 30 pupils by 300,000. £620 million is available to support the pledge, and allocations so far to Sheffield LEA amount to some £2.8 million. This has helped to reduce the size of the average Key Stage 1 class in Sheffield, Hillsborough to 25.6. The figure in January 1998 was 27.2. The number of children in infant classes of 31 or more pupils in the constituency has fallen from 1,250 in January 1998, to 230 in January 2000.

  Skills Training
  Mrs. Lait
  To ask the Secretary of State for Education and Employment what representations she has received on skills training for mothers returning to work. [127954]

  Ms Jowell
  The New Deal for Lone Parents currently provides skills training for lone parents on Income Support wishing to return to work. Help with training, normally up to NVQ level two, is available for up to 12 months, provided that the training is related to the local labour market and has been agreed with a New Deal for Lone Parents adviser. From time to time we receive representations about the nature and level of this training.

  Learning and Skills Councils
  Mr. Pollard
  To ask the Secretary of State for Education and Employment what action his Department is taking to ensure that learning and skills councils will deliver optimum assistance to small and medium-sized enterprises. [127955]

  Mr. Wicks
  The Learning and Skills Council (LSC) will establish priorities for developing the skills of the workforce and targeted strategies for engaging, influencing and meeting the needs of employers, including small and medium sized enterprises. Subject to the passage of the Learning and Skills Bill, the LSC will

  UCAS UK-domiciled applicants and acceptances to Oxford University by previous educational establishment

  Year of entry

  1995

  1996

  1997

  1998

  1999

  Number

  Percentage1

  Number

  Percentage1

  Number

  Percentage1

  Number

  Percentage1

  Number

  Percentage1

  Applicants:

  Independent

  3,399

  39

  3,501

  42

  3,393

  42

  3,361

  42

  3,416

  42

  State2

  5,210

  61

  4,765

  58

  4,644

  58

  4,645

  58

  4,671

  58

  Total

  8,609

  100

  8,266

  100

  8,037

  100

  8,006

  100

  8,087

  100

  Accepted applicants:

  Independent

  1,424

  50

  1,494

  51

  1,500

  51

  1,477

  49

  1,431

  48

  State2

  1,424

  50

  1,454

  49

  1,442

  49

  1,567

  51

  1,533

  52

  Total

  2,848

  100

  2,948

  100

  2,942

  100

  3,044

  100

  2,964

  100

  272W
  work very closely with the Small Business Service (SBS). In the vast majority of cases, the boundaries of the SBS franchises are coterminous with those of local LSCs to assist with joint working. The local Learning and Skills Councils will contract with the SBS franchises for the provision of LSC—funded workforce development services to small and medium sized enterprises, including advice on Investors in People, Modern Apprenticeships and management development. At national level we will expect the LSC National Council to invite the Chief Executive of the SBS to its meetings, and local LSC Councils will, likewise, be expected to invite a representative of the relevant SBS franchises as observers to their meetings.

  Teachers (Performance-related Pay)
  Mr. Jim Cunningham
  To ask the Secretary of State for Education and Employment what proportion of teachers have applied for the performance-related pay scheme. [127956]

  Ms Estelle Morris
  197,000 teachers in England, which represents over three quarters of the numbers eligible, have applied to cross the performance threshold in the first year of operation.

  Oxbridge Intake
  Mr. Robathan
  To ask the Secretary of State for Education and Employment what recent research he has undertaken into the proportion of undergraduates at Oxford and Cambridge universities who come from schools in the maintained sector; and what conclusions he has reached. [127957]

  Mr. Wicks
  CVCP are currently undertaking research into higher education as a follow up to their "Elitism to Inclusion" report which was published in 1998. The Higher Education Funding Council for England are preparing a report entitled "Action on Access"—which will be available in the autumn. The most recent information on access is taken from data collected by the Universities and Colleges Admissions Services (UCAS) which gives information about previous educational establishment for students normally resident in the UK. These statistics published by the Higher Education Funding Council for England are shown in the following tables.
  273W

  UCAS UK-domiciled applicants and acceptances to Cambridge University by previous educational establishment

  Year of entry

  1995

  1996

  1997

  1998

  1999

  Number

  Percentage1

  Number

  Percentage1

  Number

  Percentage1

  Number

  Percentage1

  Number

  Percentage1

  Applicants:

  Independent

  3,413

  37

  3,603

  37

  3,764

  37

  3,518

  37

  3,491

  36

  State2

  6,178

  63

  6,115

  63

  6,311

  63

  5,959

  63

  6,334

  64

  Total

  9,321

  100

  9,718

  100

  10,075

  100

  9,477

  100

  9,825

  100

  Accepted applicants:

  Independent

  1,359

  45

  1,223

  44

  1,338

  45

  1,345

  45

  1,286

  43

  State2

  1,630

  55

  1,544

  56

  1,663

  55

  1,637

  55

  1,699

  57

  Total

  2,989

  100

  2,767

  100

  3,001

  100

  2,982

  100

  2,985

  100

  1Constituent parts may not sum to total because of rounding.

  2Includes Sixth Form Centres, other secondary schools, other educational establishments, and students whose previous establishment was not known.

  Note:

  Information on previous educational establishment is only collected from students normally resident in the UK. HEFCE is now providing:

  1. £20 million funding in respect of students recruited and supported from disadvantaged backgrounds which was enhanced by a further £4 million by the Secretary of State when he addressed the AUT on 10 May 2000.

  2. £5 million for providing for students with disabilities.

  3. Funding premiums for mature and part-time students within the funding model Special funding.

  4. £5 million for a special funding programme focusing on developing regional partnerships to improve progression to HE of students from disadvantaged backgrounds, and promotion and dissemination of good practice.

  5. £2 million from HEFCE to contribute to a £4 million joint fund with the FEFC to improve pathways from FE to HE for disadvantaged groups, through links between HEIs and the new Lifelong Learning Partnerships.

  6. £2 million p.a. for Development funding to improve the quality of provision for disabled students.

  7. £4 million for HEFCE to administer the Millennium Summer Schools programme under guidance of the DfEE.

  Rapid Response Fund
  Mr. Healey
  To ask the Secretary of State for Education and Employment if he will make a statement on the deployment of the Department's rapid response fund within the Yorkshire and Humberside region. [127958]

  Mr. Wicks
  Departmental officials approved in June the first Rapid Response Fund bid within the Yorkshire and the Humber Region. Up to £236,177 will support the 300 workers being made redundant from RHP Bearings, Ferrybridge, Wakefield. Officials also expect to receive a bid to support those being made redundant from Corus, Rotherham (formerly British Steel). There is also a strong possibility of a bid being received for British Aerospace, Brough, Humberside.

  Standard Spending Assessments
  Mr. Stunell
  To ask the Secretary of State for Education and Employment what recent representations he has made to the Department of the Environment, Transport and the Regions on the review of standard spending assessments for education. [127946]

  School

  Purpose of grant allocation

  Northwick Manor Infants

  Replacement of three temporary classrooms

  Northwick Manor Infants

  Enclosure of open courtyard, development of library and IT areas

  St. Clement's CE Primary

  Replacement of two temporary classrooms

  Nunnery Wood High

  Conversion of two science laboratories

  St. Barnabas CE Primary

  Replacement of four temporary classrooms

  274W
  Ms Estelle Morris
  My right hon. Friend has regular discussions with the Deputy Prime Minister about these issues as part of the current review of local authority grant distribution. As you might expect, the future of education funding is an important part of the review, since education accounts for around 40 per cent. of local authority revenue expenditure. We expect to publish a Green Paper later this summer, which will set out a range of options for debate.

  ICT Access
  Mr. Jim Cunningham
  To ask the Secretary of State for Education and Employment what progress is being made in implementing the Government's policy on increasing access to ICT among families on low incomes. [126115]

  Mr. Wills
  [holding answer 20 June 2000]: I refer my hon. Friend to the reply I gave on 29 June 2000, Official Report, column 575W.

  New Deal for Schools
  Mr. Michael J. Foster
  To ask the Secretary of State for Education and Employment if he will list the schools in Worcester constituency which have received funding through the New Deal for schools; and in each case for what purpose the money was allocated. [128880]

  Jacqui Smith
  The table shows the information requested for the Worcester constituency.
  275W

  School

  Purpose of grant allocation

  Bishop Perowne CE High

  Asbestos testing, recording and marking

  Christopher Whitehead High

  Nunnery Wood High

  The Elgar High

  Cherry Orchard Primary

  Roof-lights risk assessment

  Cranham Primary

  Dines Green Primary

  Elbury Mount Primary

  Gorse Hill Primary

  Lyppard Grange

  Northwick Manor Infant

  Northwick Manor Junior

  Nunnery Wood Primary

  Oldbury Park Primary

  Perdiswell Primary

  Pitmaston Primary

  Red Hill CE Primary

  Ronkswood Infants

  Ronkswood Juniors

  St. Barnabas CE Primary

  Stanley Road Primary

  Warndon Infants

  Warndon Juniors

  Our Lady Queen of Peace RC Primary

  St. Clement's CE Primary

  St. George's CE Primary

  St. George's RC Primary

  St. Joseph's RC Primary

  Christopher Whitehead High

  Nunnery Wood High

  The Elgar High

  Bishop Perowne CE High

  Manor Park Special

  Rose Hill Special

  Thornton House Special

  Oakfield Pupil Referral Unit

  The Pines Pupil Referral Unit

  Gorse Hill Primary

  Replace boilers and heating system

  Pitmaston Primary

  Replacement of double mobile classroom

  Rose Hill

  Replace dilapidated Life Skill post—16 base and science facilities

  98 selected First and Primary Schools1

  Asbestos testing, recording and marking

  2 schools1

  Rewiring

  2 schools1

  Replace heating system and controls

  3 Primary schools1

  Reconstruct paved areas

  Perdiswell Primary

  Replace warm air heating

  Composite Health & Safety Bid2

  Safety filming and glazing

  Composite Health & Safety Bid2

  H&S Switches—Machines

  Cherry Orchard Primary

  Refurbishment of library

  Christopher Whitehead High

  Refurbishment of showers and changing room

  Pitmaston Primary

  Replace fire alarm

  Dines Green Primary

  Replace fire alarm

  Red Hill CE Primary

  Replace distribution boards, lighting and fire alarm

  Our Lady Queen of Peace RC Primary

  Replace fire alarm and emergency lighting

  St. George's RC Primary

  Replace fire alarm

  Cranham Primary

  Replace fire alarm

  Ronkswood Junior

  Replace fire alarm

  Rose Hill Special

  Reconstruct concrete play area

  St. George's RC Primary

  Reconstruct path and reception play area

  Rose Hill Special

  Craft Design and Technology/Art refurbishment

  Elgar High

  Disabled access (lift)

  Bishop Perowne CE High

  Refurbish Craft Design and Technology facilities

  St. Joseph's RC Primary

  Security/administration improvements

  1Individual schools not identified by the LEA at the time of bidding in NDS Phase 3. Some schools in the Worcester constituency may be included.

  2Individual schools not identified by the LEA at the time of bidding in NDS Phase 2. Some schools in the Worcester constituency may be included.

  Departmental Vehicles
  Mr. Pearson
  To ask the Secretary of State for Education and Employment if he will list for his Department and its agencies the approved list of manufacturers of(a) cars and (b) commercial vehicles; and if he will make a statement on his Department's leasing and purchasing policy. [128986]
  276W
  Mr. Wills
  The DfEE and the Employment Service do not operate an approved list of manufacturers for cars and vans.

  The DfEE and the Employment Service do not lease vehicles. Cars and vans are bought from the manufacturer that offers the best value for money across a range of vehicle specifications. This is determined by competitive tender. The current contract was awarded to Vauxhall in 1999.

  Private Finance Initiative
  Mr. Alan Williams
  To ask the Secretary of State for Education and Employment if he will list the PFI contracts entered into by his Department, indicating(a) their dates of commencement, (b) their value, (c) if they have been subject to refinancing and (d) if his Department has a claw-back entitlement to share in savings arising from refinancing. [129047]

  Mr. Wills
  The Employment Service has entered into three Private Finance Initiative contracts since 1997. It has established private finance deals for the delivery of procedural guidance via networked personal computers, for the delivery of all IT and related services, and for pay and personnel records. These are listed in the following table:

  £ million

  PFI contract

  Commencement date

  Capital value

  ESCOM

  February 1997

  4.0

  IT Partnership

  May 1998

  116.0

  HR Partnership

  January 1999

  5.8

  The commencement date is the date of financial close.

  None of these contracts has been subject to refinancing, although there is provision in the IT partnership contract for refinancing. There is no claw-back entitlement to share in savings arising from refinancing of this project. If any refinancing were proposed, the parties would be required to negotiate suitable terms.

  National Skills Task Force
  Mr. Sarwar
  To ask the Secretary of State for Education and Employment what steps he is taking to ensure that the Government's response to the National Skills Task Force study on literacy, numeracy and skills levels will be co-ordinated across the United Kingdom between his Department and the devolved Administrations. [128583]

  Mr. Wills
  Education and Training are devolved matters for Administrations in Scotland, Wales and Northern Ireland. There are liaison arrangements in place to ensure co-ordination between my Department and these Administrations. These arrangements will apply to work in response to the National Skills Task Force as they do in other areas of policy.

  City Academies
  Mr. Clappison
  To ask the Secretary of State for Education and Employment, pursuant to his oral statement of 27 June 2000,Official Report, column 755, if pupils at schools which are to be designated as city academies will have an entitlement to attend the city academy if they so wish. [128592]

  Ms Estelle Morris
  We expect most pupils at schools replaced by city academies to have the option of transferring to the city academy. In some cases, the establishment of a city academy will be part of a re-organisation involving several schools and where this happens pupils may transfer to the city academy or to another local school. Parents may also choose to send their children to a school other than the city academy.
  278W
  In all cases, the admission arrangements for each city academy will be agreed with the Secretary of State as a condition of the funding agreement and will be clear, fair and objective.

  Special Educational Needs
  Mr. Boswell
  To ask the Secretary of State for Education and Employment what arrangements are made for the provision of support, including(a) regular access to his Department's documentation, (b) access to funding for the National Grid for Learning and (c) funding for continuing professional development, for local education authority support services for children with special needs. [128324]

  Jacqui Smith
  [holding answer 4 July 2000]: At the moment, all local education authority (LEA) support services for children with special educational needs (SEN) receive "SPECTRUM" a monthly update of new DfEE publications from which support services can place orders for documentation. Each month all the publications DfEE has sent automatically to schools are posted on the EASEA website, where there is also a searchable archive of documents from past months. School and LEA staff can register with the service at www.easea.co.uk to receive a regular e-mail alert when new information fitting their personal profile of interest, is on-line. Work is in hand to automatically provide LEA support services for children with SEN with the monthly batch mailing to schools from September. Funding for the National Grid for Learning is made available to LEAs through the Standards Fund. A total of £205 million has been made available for 2000–01 of which £155 million has been provided specifically to allow LEAs to continue to equip schools in line with their ICT development plans. As such it is not available to LEA support services. Additionally, under the Standards Fund for 2000–01, £26 million is being provided to support in-service training in special educational needs. LEA support services are eligible for this funding.

  Mr. Boswell
  To ask the Secretary of State for Education and Employment how many special education needs tribunal hearings took place in each of the last five years; and what proportion of them in each year resulted in a determination in favour of a material change in provision for the pupil in question. [128791]

  Jacqui Smith
  The information requested is shown in the table.

  Year

  Decisions issued

  Upheld

  Dismissed

  1994–95

  242

  150

  92

  1995–96

  904

  522

  382

  1996–97

  981

  556

  425

  1997–98

  1,135

  701

  434

  1998–99

  1,220

  921

  299

  Note:

  'Decisions issued' is the terminology used in the Special Educational Needs Tribunal's Annual Reports where this information is published. It equates to hearings that have taken place.

  Veterinary Schools
  Mr. Boswell
  To ask the Secretary of State for Education and Employment if he will make a statement on the cost of fees and charges for students at veterinary schools. [129275]

  Mr. Wicks
  There is no special treatment in terms of fees and charges for students at university veterinary schools in England and Wales.

  Post-16 Education
  Mr. Boswell
  To ask the Secretary of State for Education and Employment if he will make a statement on the major changes set out in his second update of the transition plans for post-16 education and training. [129274]

  Mr. Wicks
  The latest version of the joint DfEE/DTI National Transition Plan was published in June 2000. The early part of the plan sets out the considerable progress made since the plan was last updated in November. The most significant changes are reflected in the plans for the Learning and Skills Council and the Inspectorates, where the plans now set out in much greater detail the steps that need to be taken over the next nine months.

  Architects
  Mr. Boswell
  To ask the Secretary of State for Education and Employment what action he is taking to improve disability awareness in the professional training of architects. [129309]

  Mr. Wicks
  The design and content of higher education courses leading to professional qualifications in architectural studies is a matter for the professional bodies which accredit and the institutions which offer that training and education. The Royal Institute of British Architects is involved in a number of initiatives aimed at increasing knowledge of disability issues among their members. Architects also undertake Continuing Professional Development and disability awareness training which includes preparation for the full implementation of Part III of the Disability Discrimination Act 1995 in October 2004.

  Common Clearance Systems
  Mr. Simon Hughes
  To ask the Secretary of State for Education and Employment what assessment he has made of the benefits of introducing common clearance systems for school applications. [127942]

  Ms Estelle Morris
  None. Under admissions legislation any parent can state a preference for any school. Local education authorities have a duty to ensure that a school place is provided if the parent wants one.

  Universities
  Paddy Ashdown
  To ask the Secretary of State for Education and Employment if he will list the universities which were established in England and Wales within the last five years with their dates of establishment; what plans he has to establish new universities over the next five years; and if he will make a statement. [128789]
  280W
  Mr. Wicks
  No universities have been established in the last five years. As far as the establishment of new universities is concerned, it is for the higher education funding councils to offer advice to the Government in the light of representations made locally.

  Pupil Costs
  Paddy Ashdown
  To ask the Secretary of State for Education and Employment what the annual levels of full fees were at independent schools in England and Wales which participated in the former assisted places scheme in the last year of its operation; what the average per capita funding was of pupils in maintained schools in the same year; and if he will make a statement. [128790]

  Ms Estelle Morris
  The last year in which children could take up assisted places was academic year 1997–98. Existing assisted pupils will continue to hold their places until the end of their current phase of education. The average day tuition fee charged by schools in England for assisted pupils in 1997–98 was £4,598. The average cost to my Department of an assisted place in that year was £4,082 when parental contributions are taken into account. The unit cost of a maintained secondary place in England in 1997–98 was £2,359.

  Figures for Wales are the responsibility of my right hon. Friend the Secretary of State for Wales.

HEALTH

  Influenza Immunisation
  Mr. Pollard
  To ask the Secretary of State for Health, pursuant to his answer of 21 February 2000,Official Report, column 778W, on influenza immunisation for healthcare workers, when he expects the Joint Committee on Vaccination and Immunisation will publish their recommendations on influenza immunisation of healthcare workers for the coming winter; and if he will make a statement. [124206]

  Yvette Cooper
  The Department's guidelines on influenza immunisation for healthcare workers for the coming winter are set out in Health Services Circular 2000/016, which was issued on 23 May 2000. A copy of the circular can be found in the Library.

  Meningitis C (Immunisation)
  Mr. Drew
  To ask the Secretary of State for Health if he will issue new advice to practitioners who are immunising against Meningitis C to take account of possible adverse reactions. [126254]

  Yvette Cooper
  [holding answer 19 June 2000]: The Deputy Chief Medical Officer wrote to all practitioners immunising against Meningitis C on 13 June 2000, with further advice about possible adverse reactions; a copy is in the Library.

  The safety of all new medicines, including vaccines, is continuously monitored by the Medicines Control Agency. Advice is sought from the independent expert advisory committees, the Committee on Safety of Medicines and Joint Committee on Vaccination and Immunisation, when appropriate. Advice to prescribers is contained in the

  281W
  Summary of Product Characteristics and to patients in the Patient Information Leaflet. Product information is updated as necessary.

  Mr. Drew
  To ask the Secretary of State for Health what measures he is taking in his evaluation of the Meningitis C immunisation programme to ensure that he receives an accurate assessment of the numbers of individuals who may be suffering an adverse reaction. [126255]

  Yvette Cooper
  [holding answer 19 June 2000]: In October 1999 a letter from the Chief Medical Officer advised doctors and pharmacists to report all suspected adverse reactions to the new meningococcal C vaccine to the Medicines Control Agency via the yellow card scheme. In December 1999, following the Committee on Safety of Medicines' advice, nurses were also invited to report suspected adverse reactions to this vaccine via the yellow card scheme. The Medicines Control Agency continuously monitors the safety of all medicines including Meningitis C vaccine. Various data sources are used including spontaneous reports of suspected reactions from health professionals, clinical trials, epidemiological studies and regular safety update reports from manufacturers. This post-licensing monitoring follows the detailed safety and efficacy trials of meningococcal C vaccine undertaken before the vaccine was licensed.

  Mr. Drew
  To ask the Secretary of State for Health if he will produce a report on the immunisation programme against Meningitis C, including reported incidents of side effects. [126253]

  Yvette Cooper
  [holding answer 19 June 2000]: The Department intends to produce a report of the meningitis C campaign after the catch-up programme is complete. The report will cover all aspects, including adverse reactions. A report along these lines was produced after the last major immunisation campaign in the United Kingdom, the measles/rubella (MR) campaign of 1994, when about 8 million children in the UK aged five to 16 were immunised.

  HIV-AIDS
  Sir Norman Fowler
  To ask the Secretary of State for Health what the total financial allocation in respect of HIV/AIDS(a) is in the current financial year and (b) was in each of the previous three years, broken down into the amounts devoted to (i) treatment and care, (ii) prevention, (iii) AIDs support grants, (iv) Section 64 grants, (v) public education and (vi) research. [127014]

  Yvette Cooper
  [holding answer 20 June 2000]: The information requested is given in the table.

  £ million

  1997–98

  1998–99

  1999–2000

  2000–01

  Treatment and care

  199.6

  228.1

  233.1

  1184.2

  HIV prevention

  51.9

  53.4

  53.4

  54.7

  AIDS Support Grant

  13.7

  13.7

  15.5

  16.0

  Section 64

  1.6

  1.5

  1.5

  1.3

  Public education

  4.3

  4.4

  5.0

  3.6

  Research

  15.4

  16.2

  320.4

  2—

  1We have introduced a new funding formula for the treatment and care budget in 2000–01. The HIV/AIDs allocation was brought in line with actual spending as part of the introduction of residence based funding.

  2We have not yet committed all Department of Health/National Health Service research and development expenditure for 2000–01, so figures for 2000–01 are not yet available.

  3Estimate

  Cancer Services
  Dr. Iddon
  To ask the Secretary of State for Health if he will list for(a) breast cancer (b) cervical cancer and (c) cancer of the prostate, (i) the number of cases diagnosed, (ii) the number of recorded and (iii) the amount of Government money spent on research in the financial year 1999–2000. [128117]

  Yvette Cooper
  Registrations of newly diagnosed cases of breast, cervical and prostate cancer in 1993 in England and Wales are as follows:

  Number

  Breast cancer

  30,495

  Cervical cancer

  3,302

  Prostate cancer

  17,208

  The estimated figures for Government spend in 1999–2000 on research supported through the Medical Research Council and the Department are as follows:

  £ million

  Breast cancer

  9.02

  Cervical cancer

  1.53

  Prostate cancer

  1.52

  These figures do not include:
  Department of Health/National Health Service support for research commissioned by the research councils and research charities taking place in the NHS (with the exception of the Royal Marsden Trust/Institute of Cancer Research). The Department spends £63 million a year of this support on cancer research. Management of budgets is devolved and details of spend at project level are not collected routinely by the Department.
  Departmental and Medical Research Council expenditure on research projects relevant to all cancers, for example on the biological basis, causes, prevention, services, psychosocial issues and palliative care.
  Government spend via the higher education funding councils to universities (from the Department for Education and Employment)
  Government spend via research councils other than the MRC (from the Department of Trade and Industry).

  Cobham Cottage Hospital
  Mr. Ian Taylor
  To ask the Secretary of State for Health if he will increase the level of resources for Epsom and St. Helier NHS Trust in respect of services at Cobham Cottage Hospital. [128463]

  Yvette Cooper
  The distribution of resources among the units of a National Health Service Trust is not properly a matter for my right hon. Friend the Secretary of State, but is decided instead by the trust itself in conjunction with its commissioning health authorities on behalf of the residents of the area. It is for East Surrey health authority and Mid Surrey Primary Care Group in liaison with Epsom and St. Helier NHS Trust to establish the correct level of funding for local services taking a range of health service priorities into account. Discussions around funding this year were concluded recently as part of the negotiations on the service and financial framework.

  Dorset Health Authority
  Mr. Fraser
  To ask the Secretary of State for Health what additional funds have been made available to NHS trusts in Dorset in the current financial year to deal with administration costs. [128640]

  Ms Stuart
  The Department does not allocate specific funds to meet National Health Service trusts' administration costs. These are met from within the general allocations to health authorities. Dorset Health Authority's allocation for 2000–01 is £487.3 million, a real terms increase of £25.5 million (5.66 per cent.).

  We firmly believe that the NHS needs a sufficient number of good managers to run services efficiently and effectively. Good management is essential to ensure that money is spent prudently on the NHS in order to secure maximum improvements in healthcare. However, we are determined to target wasteful and inefficient practice so that more money is spent on improving health and healthcare services.

  Mr. Fraser
  To ask the Secretary of State for Health how many surgical procedures he estimates the private health care sector will carry out for the Dorset Health Authority in 2000–01. [128632]

  Ms Stuart
  This information requested is not collected centrally. The hon. Member may wish to contact Major General Richard Keightley CB, Chairman of Dorset Health Authority, for information on this matter.

  Source Informatics
  Mrs. Lait
  To ask the Secretary of State for Health for what reason he withdrew his Department's application to the House of Lords in its case against Source Informatics. [129017]

  Ms Stuart
  We have concluded that it would not be in the public interest to pursue this litigation further.

  Departmental Vehicles
  Mr. Pearson
  To ask the Secretary of State for Health if he will list for his Department and its agencies the approved list of manufacturers of(a) cars and (b) commercial vehicles; and if he will make a statement on his Department's leasing and purchasing policy. [128989]

  Ms Stuart
  The Department and the agencies of the Department do not obtain cars or commercial vehicles from an approved list of manufacturers. The Department does not currently purchase vehicles but has a contract for the supply of lease cars. Drivers are free to lease the car of their choice, within the parameters laid down by the Department for the operation of the lease car scheme.

  Patient Waiting Times
  Mr. Gordon Prentice
  To ask the Secretary of State for Health how many people suffered from conditions that became inoperable in the time between diagnosis and treatment in each year since 1990. [128698]

  Mr. Denham
  The information requested is not available centrally.

  Organ Donor Card Scheme
  Mr. Swayne
  To ask the Secretary of State for Health (1) what recent assessment he has made of the effectiveness of the organ donor card scheme; and if he will make a statement; [128898]

  (2) how many transplant operations were carried out last year where the donor was identified as a consequence of carrying a donor card. [128897]

  Mr. Denham
  This information requested is not available centrally.

  Our current organ donation campaign, launched in 1998, is ongoing. It encourages people to join the National Health Service organ donor register, carry the donor card and, most importantly, discuss their wishes with their friends and family.

  Cancer Facilities (Merseyside)
  Mrs. Curtis-Thomas
  To ask the Secretary of State for Health if he will make a statement on investment in cancer facilities in Merseyside. [129222]

  Yvette Cooper
  [holding answer 5 July 2000]: Cancer services in Merseyside and Cheshire are being developed as a network of cancer units linked to the Oncology Centre at Clatterbridge Hospital on the Wirral. This is in line with the Calman-Hine report on cancer services and the emerging recommendations of the National Cancer Director, Professor Mike Richards.

  Merseyside and Cheshire have received £3.5 million from the New Opportunities Fund to invest in cancer services. In addition to this, local health authorities have received identifiable shares of the £9 million national gynaecological cancer moneys and, within their general allocations, a pro-rata share of £30 million made available nationally to improve access to cancer services.

  NHS Dentistry (Yeovil)
  Paddy Ashdown
  To ask the Secretary of State for Health what plans he has to improve access to NHS dentistry in the Yeovil constituency; and if he will make a statement. [128788]

  Mr. Hutton
  We have already made good progress towards improving access to dental services in Yeovil, Somerset. Investing in dentistry grants amounting to nearly £200,000 have been paid to dentists in the Somerset Health Authority area in return for promises of up to 17,000 new National Health Service registrations. The NHS Executive is also working with Somerset Health Authority and East Somerset NHS Trust on plans for a dental access centre. The centre would be based on a network of clinic sites, including one in Yeovil. Access centres provide a full range of NHS dental treatment, routine and urgent, to people who are not registered with a dentist.

  The NHS Executive wrote on 16 May to all health authority chief executives and regional dental advisers asking them to tell us whether more needs to be done to improve NHS dentistry in their locality and inviting ideas for potential funding.
  285W
  Further initiatives to improve access to services will form part of our plans for modernising NHS dentistry, which will be published this summer in conjunction with the National Plan for the New NHS.

  NHS Funding (Bury and Rochdale)
  Mr. Chaytor
  To ask the Secretary of State for Health what has been the total increase in revenue and capital budgets to(a) Bury and Rochdale health authority and (b) Bury NHS Health Care Trust for each financial year since 1995–96. [128003]

  Mr. Denham
  Health authorities have existed in their current form only since 1 April 1996. Therefore the cash increase for Bury and Rochdale health authority since 1996–97 is as follows:

  £ million

  1996–97

  6.6

  1997–98

  6.7

  1998–99

  8.9

  1999–2000

  116.4

  2000–01

  223.7

  1Allocations for 1999–2000 are not comparable with those for 1996–97 to 1998–99 which cover hospital and community health services only. 1999–2000 is the first year of unified allocations which cover hospital and community health services, prescribing and general practice infrastructure.

  2Includes an element of the extra £660 million announced by the Secretary of State on 28 March 2000.

  Capital budget for Bury and Rochdale health authority

  £

  1996–97

  50,000

  1997–98

  50,000

  1998–99

  50,000

  1999–2000

  534,000

  2000–01

  50,000

  Increase in the total revenue income for the Bury Health Care NHS Trust from 1995–96 to 1998–99

  £ million

  1995–96 to 1996–97

  0.170

  1996–97 to 1997–98

  1.6

  1997–98 to 1998–99

  4.4

  Note:

  The data to provide the increase for 1998–99 to 1999–2000 are not yet available

  Capital budget for the trust

  £

  1996–97

  527,600

  1997–98

  207,800

  1998–99

  194,700

  1999–2000

  404,800

  2000–01

  1,100,000

CABINET OFFICE

  Children
  Mrs. Golding
  To ask the Minister for the Cabinet Office what steps she is taking to develop cross-departmental child well-being indicators to help 286W
  monitor child outcomes and set policy goals on child well-being. [128998]

  Mr. Bayley
  I have been asked to reply.

  We have pledged to halve child poverty in 10 years and eradicate it over 20.

  "Opportunity for All" sets out 13 cross-departmental indicators referring to children and young people that will monitor the success of these and other policy priorities. The indicators are outcome focused and capture a number of aspects of well-being: income, health, education, housing and fuel poverty. It also contains a range of policy milestones, which we will use to monitor our progress in tackling child poverty.

  New Deal
  Mr. Rooney
  To ask the Minister for the Cabinet Office how many people have been employed in the Civil Service under the New Deal for the young and unemployed. [129914]

  Marjorie Mowlam
  As at 1 April 2000, the information on Civil Service departments (including their agencies) participating as employers in the New Deal is as follows:

  New deal starts since programme began as at 1 April 2000

  Main department (inc. agencies)

  Number

  Ministry of Agriculture, Fisheries and Food

  38

  Intervention Board

  3

  Cabinet Office

  9

  Charity Commission

  18

  Culture, Media and Sport

  4

  Ministry of Defence

  95

  Education and Employment

  1736

  Office for Standards in Education

  1

  Environment, Transport and the Regions

  18

  Export Credits Guarantee Department

  4

  Foreign and Commonwealth Office

  4

  Government Offices for the Regions

  4

  Health

  27

  Home Office

  73

  International Development

  1

  Law Officers' Departments

  10

  Lord Chancellor's Department

  22

  Lord Advocate's Department

  3

  National Assembly for Wales

  33

  Northern Ireland Office

  11

  Scottish Executive

  29

  Social Security

  467

  Trade and Industry

  46

  HM Treasury

  2

  HM Customs and Excise

  35

  Office of Government Commerce

  1

  Inland Revenue

  256

  Office for National Statistics

  10

  Royal Mint

  3

  Total

  2,963

  Departmental Vehicles
  Mr. Pearson
  To ask the Minister for the Cabinet Office how many(a) cars and (b) commercial vehicles operated by her Department were manufactured (i) in the UK, (ii) in the EU and (iii) elsewhere. [122267]
  287W
  Mr. Ian McCartney
  [pursuant to his reply, 17 May 2000, c. 141W]: I regret that the figures provided were incomplete and should have been as follows:

  The Government Car and Despatch Agency operates a fleet of vehicles, as shown in the table, for the Government as a whole. Seven of these vehicles are owned by GCDA but operated by the Cabinet Office (Infrastructure Division).

  (a)

  (b)

  Cars

  Commercial vehicles

  Total

  (i) UK

  60

  16

  76

  (ii) EU

  130

  41

  171

  (iii) Elsewhere

  0

  0

  0

  Total

  190

  57

  247

  In addition, one vehicle is leased by the Cabinet Office (Infrastructure Division) from Lex, which is made in the UK; one car is leased by the Civil Service College from A. A. Clark Ltd. which is made in the EU, as well as three commercial vehicles made in the UK.

  The following table shows the vehicles operated by the Cabinet Office (Security Facilities Division):

  (a)

  (b)

  Cars

  Commercial vehicles

  Total

  (i) UK

  19

  8

  27

  (ii) EU

  4

  17

  21

  (iii) Elsewhere

  0

  0

  0

  Total

  23

  25

  48

CULTURE, MEDIA AND SPORT

  National Lottery
  Miss Geraldine Smith
  To ask the Secretary of State for Culture, Media and Sport how much Lottery money has been awarded to projects in the Lancaster City council district since the National Lottery began; and if he will list the projects concerned. [128346]

  Kate Hoey
  According to my Department's National Lottery Awards Database, there have been 134 awards in the Lancaster City council district since the Lottery began, with a total value of £16,913,630. I have placed a list of these projects in the Libraries of the House.

  Free TV Licences
  Shona McIsaac
  To ask the Secretary of State for Culture, Media and Sport what estimate he has made of the cost of extending free TV licences for pensioners aged over 75 years to(a) 70 to 74 and (b) 65 to 69-year-olds. [128564]

  Janet Anderson
  For the UK in the year 2000–01 the additional annual cost of extending free TV licences to

  (a) 65–69 year olds is £200 million, and

  (b) 70–74 year olds is £200 million.

  Lottery Awards
  Mrs. Virginia Bottomley
  To ask the Secretary of State for Culture, Media and Sport how much Lottery money was spent on arts projects, and how many arts projects were funded in(a) 1997 and (b) 1999; since the commencement of the Lottery, how much money has been spend on arts projects; and how many arts projects have been funded in total. [128701]

  Mr. Chris Smith
  I have asked the Arts Council of England, as the main distributing body of lottery money for the arts, to provide this information. When it is available, I will write to the right hon. Member and place a copy in the Library of the House.

  Mr. Hoyle
  To ask the Secretary of State for Culture, Media and Sport (1) if he will make a statement on the amount of Lottery funds dedicated to good causes in the North-West and to(a) London, (b) the South-East, (c) Scotland and (d) Wales; [128829]

  (2) if he will make a statement on the amount of Lottery funds dedicated to good causes in (a) Chorley and (b) the North-West as a whole. [128828]

  Kate Hoey
  The table shows the allocation of Lottery funds to Scotland and Wales under various Lottery programmes. There is no formal allocation of Lottery funds set out in statute or Government directions for Funds distributed to charities, projects to mark the year 2000 and the beginning of the third millennium, or the national heritage; nor is there any formal allocation within England for any Lottery funds.

  Percentage of funds

  Programme

  Scotland

  Wales

  Arts

  8.9

  5

  Sport

  8.1

  4.5

  ICT training for teachers and school library staff (New Opportunities Fund)

  10.1

  5.5

  ICT training for public library staff (New Opportunities Fund)

  11.85

  4.35

  All other New Opportunities Fund programmes

  11.5

  6.5

  The amount of Lottery funds awarded in Chorley, the North-West, London, the South-East, Scotland and Wales, according to my Department's National Lottery Awards Database, are set out in the table.

  £

  Region

  Amount awarded

  Chorley

  2,176,661

  North West

  492,379,174

  London

  1,254,454,386

  South East

  485,686,749

  Scotland

  733,900,053

  Wales

  416,234,366

  Ministerial Code
  Mr. Robathan
  To ask the Secretary of State for Culture, Media and Sport (1) on how many occasions since May 1997 Ministers in his Department have made a declaration of interest to their colleagues under circumstances envisaged in Paragraph 110 of the Ministerial Code; [129164]
  289W
  (2) how many times ministers in his Department have sought the advice of the Permanent Secretary under the circumstances envisaged in Paragraphs 118, 121 and 123 of the Ministerial Code; and on which occasions such advice was sought. [129175]

  Mr. Chris Smith
  Information relating to internal advice and consultation is not disclosed under Exemption II of the code of Practice on Access to Government Information.

FOREIGN AND COMMONWEALTH AFFAIRS

  Lord Levy
  Mr. Viggers
  To ask the Secretary of State for Foreign and Commonwealth Affairs what facilities have been made available to Lord Levy by the Foreign and Commonwealth Office in the last 12 months. [128162]

  Mr. Hain
  I refer to the answer by my right hon. Friend the Prime Minister of 30 March 2000,Official Report, column 245W, and to my answers of 7 June 2000, Official Report, column 291W, and 30 March 2000, Official Report, columns 261–62W. Since those answers, Lord Levy has also stayed in the Ambassador's residence in Egypt.

  Northern Cyprus
  Mr. Cox
  To ask the Secretary of State for Foreign and Commonwealth Affairs what action he has taken on the Cuco report to the Council of Europe on Turkish settlers in Northern Cyprus; and if he will make a statement. [128891]

  Mr. Vaz
  The UK is in regular contact with all those with an interest in the Cyprus settlement process. As recommended in the Cuco report, the UK continues to promote person-to-person contact on the island and to urge the parties involved in the UN process to co-operate with Kofi Annan in a constructive and flexible manner.

  Step Change Project
  Mr. Stephen O'Brien
  To ask the Secretary of State for Foreign and Commonwealth Affairs which Ministers and officials have participated in the Step Change Project efforts, initiatives and visits; and if he will list those efforts, initiatives and visits. [128722]

  Mr. Vaz
  As part of the Government's Step Change initiative, all Departments have taken steps to increase contacts with EU member states and the applicants. It is impossible to quantify the precise number of initiatives and visits which have arisen from the process. Ministers and officials with an interest in EU business across all Departments have participated in the initiative.

  Mr. Stephen O'Brien
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list those backbench hon. Members who have participated in the Step Change Project efforts, initiatives and visits. [128719]

  Mr. Vaz
  The Step Change initiative is designed to build on and extend Government-to-Government links. As such, it involves Ministers and officials in increasing contacts with EU member states and applicant countries.290W
  Activities arising from the Government's increased engagement with its partners may involve other participants, including MPs (from all parties).

  Mr. Stephen O'Brien
  To ask the Secretary of State for Foreign and Commonwealth Affairs what has been the cost to date of the Step Change Project; and if he will itemise those costs. [128720]

  Mr. Vaz
  It is not possible to quantify the costs arising solely from the Step Change initiative since it is an integral part of the Government's European policy, which builds on and extends existing contacts.

  MINECOR
  Mr. Stephen O'Brien
  To ask the Secretary of State for Foreign and Commonwealth Affairs what has been the cost to date of MINECOR; and if he will itemise those costs. [128721]

  Mr. Vaz
  The monthly meetings of the Ministerial Group for European Co-ordination incur no additional costs.

  Ministerial Code
  Mr. Robathan
  To ask the Secretary of State for Foreign and Commonwealth Affairs (1) how many times Ministers in his Department have sought the advice of the Permanent Secretary under the circumstances envisaged in Paragraphs 118, 121 and 123 of the Ministerial Code; and on which occasions such advice was sought; [129168]

  (2) on how many occasions since May 1997 Ministers in his Department have made a declaration of interest to their colleagues under circumstances envisaged in Paragraph 110 of the Ministerial Code. [129155]

  Mr. Robin Cook
  Information relating to internal advice and consultation is not disclosed under Exemption II of the Code of Practice on Access to Government Information.

  Armenia
  Ms Osborne
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the export of demining equipment to Armenia. [129911]

  Mr. Vaz
  The Government have recently approved the export of demining equipment for operations in Armenia. These will be used by the HALO Trust during humanitarian landmine clearance operations. This licence was granted for humanitarian purposes. It also reflects the determination of the Government to eliminate the scourge of landmines.

  The UK remains committed to the OSCE arms embargo against both Azerbaijan and Armenia, which the UK interprets as covering all goods and technology in Part III of Schedule 1 to the Export of Goods (Control) Order 1994 (commonly known as the military list).

  Visas (Istanbul)
  Mr. Brady
  To ask the Secretary of State for Foreign and Commonwealth Affairs what the current waiting time is for a person applying in Istanbul for a visa to visit the UK for business purposes to be granted an initial interview. [129284]
  291W
  Mr. Vaz
  91 per cent. of visit visa applications in Istanbul are processed without the applicant requiring a full interview and would look to process their application within 24 hours. The few visitors who require a full interview, including any applicants travelling for business purposes, currently have to wait 10 days.

LORD CHANCELLOR'S DEPARTMENT

  PFI Contracts
  Mr. Alan Williams
  To ask the Parliamentary Secretary, Lord Chancellor's Department if he will list the PFI contracts entered into by his Department indicating(a) their dates of commencement, (b) their value, (c) if they have been subject to refinancing and (d) if his Department has a claw-back entitlement to share in the savings arising from refinancing. [129054]

  Jane Kennedy
  The Lord Chancellor's Department has signed the following PFI contracts:

  1. LOCCS (Courts computer system):

  (a) commenced October 1996;

  (b) capital value £14m;

  (c) no;

  (d) no.

  2. ARAMIS (A Resource Accounting and Management Information System):

  (a) commenced December 1997;

  (b) capital value £39.52m;

  (c) no;

  (d) no.

  3. Libra (Magistrates' courts IT system):

  (a) commenced December 1998;

  (b) capital value £75m;

  (c) no;

  (d) yes.

  4. Probate Records Centre (New facility for holding and issuing probate records):

  (a) commenced July 1999;

  (b) capital value £10.89m;

  (c) no;

  (d) yes.

  In addition, the Lord Chancellor's Department supports the following magistrates' courthouse PFI projects which have been signed by local authorities:

  1. Hereford and Worcester Magistrates' Courts:

  (a) commenced February 2000;

  (b) capital value £21m;

  (c) no.

  (d) no.

  2. Humberside Magistrates' Courts:

  (a) commenced March 2000;

  (b) capital value £22m;

  (c) no;

  (d) yes.

  Housing Act 1996
  Mr. Love
  To ask the Parliamentary Secretary, Lord Chancellor's Department how many appeals were 292W
  heard against reviews undertaken under section 2.4 of the Housing Act 1996 in (a) 1997–98, (b) 1998–99 and (c) 1999–2000, in each county court. [128907]

  Mr. Lock
  Statistics specifically on appeals against reviews undertaken under section 204 of the Housing Act 1996 are not collected and could be provided only at disproportionate cost.

  Departmental Vehicles
  Mr. Pearson
  To ask the Parliamentary Secretary, Lord Chancellor's Department if he will list for his Department and its agencies the approved list of manufacturers of(a) cars and (b) commercial vehicles; and if he will make a statement on his Department's leasing and purchasing policy. [128996]

  Mr. Lock
  I refer my hon. Friend to the written answer, covering the Government Car and Despatch Agency, given today in another place by my noble and learned Friend the Minister of State at the Cabinet Office to the noble Lord Hoyle. For the Lord Chancellor's Department and its agencies, HM Land Registry, the Public Record Office and the Northern Ireland Court Service the current manufacturers on approved lists for cars are: Citroen, Fiat, Ford, Honda, Land Rover, Peugeot, Rover and Vauxhall.

  There are no approved lists of manufacturers for commercial vehicles.

  Vehicles are purchased through Government contracts, which determine the choice that is available.

  Vehicles are procured in line with the Government's policy to secure value for money for the taxpayer and the EC procurement rules.

  New Deal
  Mr. Brady
  To ask the Parliamentary Secretary, Lord Chancellor's Department how many employees of his Department and its agencies have been recruited from the New Deal; and what percentage this represents of total staff. [129100]

  Mr. Lock
  I refer the hon. Member to the written answer given today,Official Report, column 292W, by my right hon. Friend the Minister for the Cabinet Office to my hon. Friend the Member for Bradford, North (Mr. Rooney). The number of New Dealers within my Department, its executive agencies and the Land Registry and Public Records Office represents 0.1 per cent. of total staff. This figure does not include those participants in the New Deal scheme who have joined the Court Service and Public Trust Office agencies or the Land Registry or Public Records Office through normal open recruitment schemes and have taken up unsubsidised places. Statistics on these members of staff are not currently held centrally; however, centralisation of these records is planned.

HOUSE OF COMMONS

  Government Bills
  Mr. Brady
  To ask the President of the Council how many amendments to Government Bills tabled during
  293W
  the present Parliament by (a) Opposition spokesmen, (b) Opposition backbench hon. Members and (c) Government backbench hon. Members which had been selected were not debated on the Floor of the House as a result of timetabling of the report Stage of Bills. [127857]

  Amendments tabled by Opposition spokesmen but not debated

  Amendments tabled by Opposition backbenchers but not debated

  Amendments tabled by Government backbenchers but not debated

  Session 1998–99

  Local Government Bill: Further consideration, 24 March 1999

  11

  0

  0

  Greater London Authority Bill: Consideration, 4 May 1999

  11

  0

  0

  Greater London Authority Bill: Further consideration, 5 May 1999

  1

  0

  0

  Welfare Reform and Pensions Bill: Further consideration, 20 May 1999

  1

  1

  0

  Health Bill [Lords]: Further consideration, 15 June 1999

  47

  0

  1

  Immigration and Asylum Bill: Consideration, 15 June 1999

  0

  0

  0

  Immigration and Asylum Bill: Further consideration, 16 June 1999

  13

  1

  0

  Access to Justice Bill [Lords]: Consideration, 22 June 1999

  0

  0

  0

  Youth Justice and Criminal Evidence Bill [Lords]: Consideration, 8 July 1999

  0

  0

  0

  Food Standards Bill: Consideration 22 July 1999

  8

  0

  0

  Session 1999–2000 (up to 30 June 2000)

  Representation of the People Bill: Further consideration, 20 January 2000

  0

  0

  0

  Financial Services and Markets Bill: Further consideration, 9 February 2000

  0

  0

  0

  Transport Bill: Consideration, 9 May 2000

  21

  1

  1

  Transport Bill: Further consideration, 10 May 2000

  9

  2

  0

  Nuclear Safeguards Bill: Consideration, 22 May 2000

  0

  15

  0

  Sea Fishing Grants (Charges) Bill: Consideration, 22 May 2000

  0

  0

  0

  Royal Parks (Trading) Bill: Further consideration, 22 May 2000

  0

  1

  0

  Television Licences (Disclosure of Information) Bill: Consideration, 22 May 2000

  0

  3

  0

  Note:

  Figures include amendments only selected for debate

  1Standing Committee and Committee of the Whole House amendments are excluded. We have not distinguished between "Guillotine" and "Programme" motions.

PRIME MINISTER

  UK Delegations
  Mr. Win Griffiths
  To ask the Prime Minister if there are any changes in the composition of the United Kingdom delegation to the Parliamentary Assembly of the Council of Europe and the assembly of the Western European Union. [129909]

  The Prime Minister
  The hon. Member for Ruislip, Northwood (Mr. Wilkinson) has been appointed as a representative in place of the late Michael Colvin.

HOME DEPARTMENT

  Criminal Conviction Certificates
  Mr. Cohen
  To ask the Secretary of State for the Home Department with respect to the Criminal Conviction Certificates to be issued by the Criminal Records Bureau what plans he has(a) to issue advice to employers requesting access to such certificates of job applicants and (b) to extend the statutory code of practice which covers other certificates to the Criminal Conviction Certificate; what research he has undertaken on the impact of the certificate on recidivism; for what activities, other than employment and visa applications, the Criminal Conviction Certificate will be used; and if he will make a statement. [129187]
  294W
  Mrs. Beckett
  The information requested could be provided only for Sessions 1998–99 and 1999–2000 (to 30 June) and is included in the following table1. Information for session 1997–98 could be provided only at disproportionate cost.

  Mr. Charles Clarke
  Guidance to employers and others on the use of Criminal Convictions Certificates (CCCs) is in course of preparation. We shall consult widely, including with representatives of employers' organisations, before issuing the guidance. We have not undertaken specific research on the impact of the certificate on recidivism. But the guidance will encourage employers to consider the relevance of information contained in certificates to the particular position being applied for. We shall be working closely with employers' organisations and other interests to ensure that employers are discouraged from rejecting applicants solely on the basis of their criminal records without careful consideration of all the relevant factors.

  The Code of Practice prescribed by section 122 of the Police Act 1997 applies to the use of information provided to registered persons. As the registration arrangements apply only to the higher levels of certificate, the code will not apply to CCCs. We shall be using the code to ensure that Registered Bodies fully understand their obligations under the legislation, and to promote good practice in the handling, interpreting and disposal of information received from the Criminal Records Bureau in connection with Criminal Record Certificates and Enhanced Criminal Record Certificates. To the extent that similar guidance is needed in relation to CCCs, we shall include it in the guidance we shall be issuing to applicants, employers and other interested parties.
  295W
  While the main reason for introducing CCCs is to improve the quality of employment decisions, anyone may apply for a certificate in relation to their own records, and use it as they wish.

  Police (Out-of-court Settlements)
  Mr. Cohen
  To ask the Secretary of State for the Home Department if he will list the out-of-court settlements agreed to by UK police forces since 1 January 1998 which included a requirement of(a) non-disclosure of the terms of the settlement and (b) non-publication of the circumstances surrounding actions complained of. [128742]

  Mr. Charles Clarke
  In the reply I gave my hon. Friend on 5 July 2000,Official Report, columns 239–40W, I gave details of out-of-court settlements. Information is not recorded centrally on which out-of-court settlements were subject to a non-disclosure or non-publication requirement.

  Prisoners (Mental Health)
  Mr. Cohen
  To ask the Secretary of State for the Home Department what response he has made to the report of the Prison Inspectorate team on the care of prisoners with mental health problems; and if he will make a statement. [129107]

  Mr. Boateng
  All prisons and the local health authorities in which they are situated have been asked, in line with the programme of reform set out in "The Future Organisation of Prison Healthcare" (March 1999), by March 2001 at the latest jointly to assess prisoners' health needs and identify appropriate services to meet them and effective means of delivery.

  These should include inreach into prisons from community mental health teams as part of the broader development of mental health services as set out in the National Service Framework for Mental Health. Implementation of improvements through individual prison health plans is scheduled to begin from April 2001, although reforms are well underway in a number of prisons already.

  Sir Peter Lloyd
  To ask the Secretary of State for the Home Department if he will make a statement on progress in implementing the recommendation of the Joint Prison Service and NHS Executive Working Group in its report, "Future Organisation of Prison Health Care" published in March 1999, with particular reference to progress made in securing the care of mentally ill prisoners in line with NHS mental health policy in respect of its arrangements for referral and admission of such prisoners to high and medium secure psychiatric services. [129004]

  Mr. Boateng
  All prisons and the local health authorities in which they are situated have been asked, in line with the programme of reform set out in "The Future Organisation of Prison Healthcare" (March 1999), by March 2001 at the latest jointly to assess prisoners' health needs and identify appropriate services to meet them and effective means of delivery.

  These should include in reach into prisons from community mental health teams as part of the broader development of mental health services as set out in the National Service Framework for Mental Health. Implementation of improvements through individual
  296W
  prison health plans is scheduled to begin from April 2001, although reforms are well underway in a number of prisons already.

  The Prison Service and the NHS are now actively monitoring the number of prisoners awaiting transfer to secure psychiatric hospitals and waiting times, referring particularly difficult cases to the newly established NHS Regional Specialist Commissioning Groups for review or transfer action, as appropriate.

  Anti-social Behaviour Orders
  Mr. Edwards
  To ask the Secretary of State for the Home Department (1) how many anti-social behaviour orders have been served in each police authority area in Wales; [128581]

  (2) what advice he has given to local authorities in Wales on the use of anti-social behaviour orders. [128582]

  Mr. Charles Clarke
  As far as we are aware, no anti-social behaviour orders (ASBO's) have been granted in Wales.

  In March 1999, the Home Office issued guidance on anti-social behaviour orders. In June 2000, this was supplemented by guidance on drawing up local ASBO protocols. Both documents have been sent to all local authorities in England and Wales. In addition to the guidance, my officials have spoken at three seminars on ASBO's, which were attended by representatives from local authorities in Wales: at Conwy in December last year, and at Liverpool and Bridgend in March and April this year respectively.

  Dr. Kumar
  To ask the Secretary of State for the Home Department how many anti-social behaviour orders have been issued for(a) juveniles, (b) adults and (c) in total (i) nationally, (ii) on Teesside and (iii) in the constituency of Middlesbrough, South and Cleveland, East; and if he will make a statement. [128639]

  Mr. Charles Clarke
  Figures for the number of anti-social behaviour orders granted are being collected centrally with effect from 1 June. However, we understand that at least 80 such orders were issued in England and Wales between 1 April 1999 and 31 May this year, including one against an adult in the Cleveland police area. We understand that the order does not apply in the constituency of Middlesbrough, South and Cleveland, East. At lease 27 anti-social behaviour orders nationally have been issued against people under the age of 18.

  Mr. Chaytor
  To ask the Secretary of State for the Home Department how many anti-social behaviour orders have been issued to date in each district of Greater Manchester. [128001]

  Mr. Charles Clarke
  Figures for the number of anti-social behaviour orders granted are being collected centrally with effect from 1 June. However, we understand that at least 80 such orders were issued in England and Wales between 1 April 1999 and 31 May this year, including at least seven in Greater Manchester. The figure is not broken down by district.

  Speed Cameras
  Mr. Simon Hughes
  To ask the Secretary of State for the Home Department how many speed camera fines were
  297W
  issued in each of the last 10 years; what was the income from speed camera fines in each of those years; and if he will make a statement. [128389]

  Mr. Charles Clarke
  [holding answer 3 July 2000]: The information currently available is for the years 1993–97 and concerns fixed penalties issued and prosecutions undertaken for speeding offences detected by automatic cameras. Details are published in the Home Office Statistical Bulletin, Motoring Offences, England and Wales 1997. A copy is available in the Library.

  The precise income to the Treasury from the penalties imposed is not known, but the fixed penalty for speeding offences during the period was £40 and the average fine imposed by a court for a speeding offence in 1997 was £119.

  The table shows average fines at magistrates' courts for certain motoring offices1and average fines revalued to 1987 prices2(shown in brackets).

  England and Wales

  Year

  Speed limit offences (£)

  1987

  57

  1988

  63 (60)

  1989

  77 (68)

  1990

  83 (67)

  1991

  85 (65)

  1992

  87 (64)

  1993

  127 (92)

  1994

  113 (80)

  1995

  107 (73)

  1996

  101 (67)

  1997

  119 (77)

  1Only fines which are principal sentences are included

  2As estimated by the general index of retail prices

  CCTV Schemes
  Mr. Simon Hughes
  To ask the Secretary of State for the Home Department how many CCTV schemes have been funded by the Government in each of the last 10 years; and what is the planned expenditure in future years. [128386]

  Mr. Charles Clarke
  [holding answer 3 July 2000]: The available information is shown in the table:

  Funded schemes

  Cumulative totals

  Year

  Number

  Value £ million

  Number

  Value £ million

  1994–95

  106

  5

  106

  5

  1995–96

  0

  —

  106

  5

  1996–97

  259

  17

  365

  22

  1997–98

  190

  15

  555

  37

  1998–99

  32

  1.5

  587

  38.5

  1999–2000

  342

  59.6

  929

  98.5

  Between 1994–95 and 1998–99, schemes were funded under a Home Office Closed Circuit Television (CCTV) Challenge Competition. From 1999–2000, schemes are funded under the Crime Reduction Programme CCTV initiative. Around £90 million remains to be allocated under this initiative, which runs to the end of December 2001.
  298W
  Information prior to 1994–95 is not available. CCTV measures under the earlier Safer Cities and Single Regeneration Budget Programmes (pre 1994) are not separately identifiable.

  Special Units (Prisons)
  Dr. Lynne Jones
  To ask the Secretary of State for the Home Department how many alarm bells were rung in each calendar year from 1986 to date(a) in the Special Close Supervision Unit in C Wing Parkhurst Prison, (b) in the remainder of Parkhurst Prison and (c) on average in the remainder of the other Special CS Units, with particular reference to Lincoln, Hull, Woodhill and Durham. [128618]

  Mr. Boateng
  The information requested in relation to Parkhurst could be obtained only at disproportionate cost. The information requested in relation to the special units at Lincoln or Hull is not available. In relation to Durham and Woodhill, the information requested is only available from 1998, when the Close Supervision Centre (CSC) system came into operation. Since 1998, there has been an annual average of four other occasions when the alarm bell has rung. At Woodhill, there has been an annual average of 12 occasions when the alarm bell has rung.

  Young Offenders
  Dr. Kumar
  To ask the Secretary of State for the Home Department what health services are available to young people(a) sentenced and (b) remanded in custody; what specialist mental health services are available to repeat young offenders; and if he will make a statement. [128784]

  Mr. Boateng
  Young people held in prison custody, whether on remand or sentenced, have access to a full range of primary and specialist healthcare services through the institution's healthcare centre. Prison doctors will arrange for any necessary specialist treatment to be provided either within the institution or as an in or out patient at an outside hospital, as appropriate.

  Young offenders needing in-patient treatment for mental disorder may be transferred to psychiatric hospitals. The care and treatment of inmates who do not need to be admitted to hospital is generally undertaken by prison healthcare staff under the supervision of visiting NHS specialists. Part of the substantial programme of reform to prison healthcare now underway is aimed at extending inreach from community mental health teams into prison to improve standards of care for such prisoners.

  Dr. Kumar
  To ask the Secretary of State for the Home Department what academic and vocational education and training is available to young people serving custodial sentences; and if he will make a statement. [128630]

  Mr. Boateng
  Education in Prison Service establishments is provided by education contractors. For all prisoners it focuses on a core curriculum of basic educational skills (literacy and numeracy), life and social skills, information technology and generic preparation for work. Prisoners of compulsory school age as defined in section 8 of the Education Act 1996 must be provided with at least 15 hours a week of education or training, plus five hours of physical education. For juveniles, life and social skills must include citizenship, sex and relationships education, and preparation for work.
  299W
  Education contractors are expected to support students taking General Certificate of Secondary Education examinations by liaising with their previous school.

  Education for prisoners over school leaving age is entirely voluntary. Prisoners aged between 17 and 21 should be offered at least two hours a week of physical education.

  There is a wide range of accredited vocational training available in Young Offender Institutions. Areas covered includes construction industry training; engineering; motor vehicle maintenance; industrial cleaning; catering; office skills; information technology; and agriculture and horticulture.

  Life Tariffs
  Mr. Stinchcombe
  To ask the Secretary of State for the Home Department how many prisoners have a whole life tariff. [129219]

  Mr. Boateng
  There are at present 23 people in custody in England and Wales with whole life tariffs.

  Hilda Murrell
  Mr. Paul Marsden
  To ask the Secretary of State for the Home Department if he will make a statement on progress made to establish the identity of the DNA tested by the Forensic Science Service in connection with the Hilda Murrell murder case. [128864]

  Mr. Charles Clarke
  I understand from West Mercia Constabulary that they are awaiting the outcome of investigations by the Forensic Science Service into the remaining forensic evidence.

  Women Prisoners
  Mr. Stinchcombe
  To ask the Secretary of State for the Home Department how many women prisoners are held in prison establishments(a) over 25 miles, (b) over 50 miles and (c) over 100 miles from their committal Crown court. [129198]

  Mr. Boateng
  The following information is based on the distance that female prisoners are held from their committal court town. The Prison Service does not distinguish between prisoners who have been committed from Crown court or magistrates' court. The data were collected on 15 June 2000 and are set out in the table in the nearest format to that requested. There are in the region of 1,000 female prisoners held under 25 miles from their committal court town.

  Distance from home area

  Number of female prisoners1

  Between 25 and 50 miles

  800

  Between 50 and 100 miles

  900

  Over 100 miles

  600

  Total over 25 miles

  2,300

  1Rounded to nearest hundred

  Prison Facilities
  Mr. Stinchcombe
  To ask the Secretary of State for the Home Department how many prisons have visiting areas with a supervised children's play area. [129200]
  300W
  Mr. Boateng
  We estimate that there are around 90 play areas in visiting areas of prison establishments. Not all of these are supervised at all times.

  Mr. Stinchcombe
  To ask the Secretary of State for the Home Department which prisons(a) have and (b) do not have prisoner representation on their anti-bullying committees. [129197]

  Mr. Boateng
  Prison Service Order number 1702 (PSO 1702) sets out the requirement for all prison establishments to have a local strategy to reduce bullying. It defines the elements that the strategy must contain and those that may be considered for inclusion.

  The expected practice is that every establishment will have an anti-bullying committee. PSO 1702 suggests that committees may include prisoner representatives, but urges establishments to exercise caution to avoid these prisoners being viewed as informants. It also suggests there are alternative ways of enabling prisoners to put their views forward.

  The statistics required are not held centrally and could not be obtained reliably in time to answer the question. A brief audit of copies of some local strategies held in Prison Service headquarters suggests that establishments have opted for the cautious approach and do not have prisoner representatives on their committee.

  Incentives Scheme
  Mr. Stinchcombe
  To ask the Secretary of State for the Home Department in which prisons, prisoners who maintain their innocence are ineligible for progression to the enhanced stage of the incentives and earned privileges scheme. [129201]

  Mr. Boateng
  Under the national framework for incentives and privileges the criteria for the earning and retention of privileges do not include acceptance of guilt by the prisoner but do include constructive participation in the sentence planning process.

  Sentence planning may include the completion of an offending behaviour programme. If a prisoner then refuses to address his or her offending behaviour this will be of relevance in assessing his or her privilege level and may be sufficient to deny him or her enhanced status.

  Mobile Police Units
  Mr. Simon Hughes
  To ask the Secretary of State for the Home Department if he will make a statement on the use of mobile police units to help police rural areas. [128534]

  Mr. Charles Clarke
  [holding answer 5 July 2000]: The Government welcome imaginative and innovative ways of working by the police, including the use where appropriate of mobile units. To enhance policing in rural areas we have recently announced the allocation of a

  301W
  specific £15 million from the Police Modernisation Fund. This will provide a significant boost to police capabilities and bring direct benefit to the countryside. How the best use is made of the resources available and how the police operate in particular local circumstances are matters for the local Chief Constable.

  Burns Inquiry
  Mr. Clifton-Brown
  To ask the Secretary of State for the Home Department in respect of the implementation of the Burns report on banning hunting with hounds, (1) what estimate he has made of the number of jobs that will be lost(a) directly and (b) indirectly as a result of the ban; [129039]

  (2) what estimate he has made of the (a) number of additional firearms licences that will be required to control foxes, (b) safety of lamping foxes at night with high-powered rifles and (c) total cost of compensation broken down by (i) value of animals to be destroyed, (ii) redundant property and (iii) fees and other expenses. [129127]

  Mr. Mike O'Brien
  The consequences of a ban on hunting with dogs will be considered as the legislative options for a Hunting Bill are drawn up.

  Fraud and forgery offences

  1979

  1983

  1987

  1992

  Police force

  Offences recorded

  Clear-up rate (%)

  Offences recorded

  Clear-up rate (%)

  Offences recorded

  Clear-up rate (%)

  Offences recorded

  Clear-up rate (%)

  Avon and Somerset

  2,570

  90

  3,507

  78

  5,537

  75

  5,699

  46

  Bedfordshire

  1,783

  90

  1,199

  60

  1,648

  59

  2,101

  42

  Cambridgeshire

  928

  87

  910

  70

  967

  66

  1,764

  49

  Cheshire

  982

  98

  1,690

  91

  1,642

  83

  2,414

  74

  Cleveland

  2,140

  78

  1,501

  65

  2,598

  58

  1,679

  36

  Cumbria

  1,094

  91

  622

  74

  935

  81

  858

  63

  Derbyshire

  2,547

  94

  1,973

  90

  1,489

  84

  1,349

  55

  Devon and Cornwall

  2,289

  86

  3,628

  87

  3,849

  79

  3,601

  46

  Dorset

  2,271

  92

  2,178

  84

  2,824

  83

  3,726

  87

  Durham

  1,391

  97

  1,497

  86

  1,840

  18

  2,572

  75

  Essex

  2,281

  86

  1,734

  61

  1,966

  60

  3,670

  40

  Gloucestershire

  780

  92

  876

  69

  1,356

  82

  2,087

  46

  Greater Manchester

  8,066

  96

  13,746

  87

  12,426

  83

  11,819

  74

  Hampshire

  4,231

  91

  2,826

  67

  3,862

  73

  5,146

  61

  Hertfordshire

  3,437

  97

  1,660

  84

  2,531

  90

  1,594

  51

  Humberside

  1,217

  84

  1,525

  76

  2,827

  55

  3,184

  44

  Kent

  2,672

  89

  1,482

  58

  1,842

  60

  4,356

  40

  Lancashire

  2,512

  94

  2,791

  84

  4,384

  92

  3,833

  80

  Leciestershire

  1,349

  93

  2,107

  81

  2,048

  76

  3,156

  51

  Lincolnshire

  690

  82

  809

  70

  933

  61

  1,404

  64

  City of London

  407

  52

  372

  56

  499

  46

  485

  45

  Merseyside

  3,342

  83

  5,416

  81

  4,680

  73

  5,098

  73

  Metropolitan police district

  25,954

  60

  29,714

  49

  27,892

  47

  39,664

  44

  Norfolk

  1,108

  86

  1,001

  77

  1,096

  72

  1,814

  57

  Northamptonshire

  1,285

  86

  1,058

  78

  1,237

  65

  1,556

  52

  Northumbria

  2,413

  89

  2,204

  57

  3,081

  71

  3,507

  37

  North Yorkshire

  1,267

  93

  895

  77

  1,070

  77

  1,033

  72

  Nottinghamshire

  2,850

  78

  2,116

  54

  2,760

  57

  4,023

  37

  South Yorkshire

  1,845

  89

  1,648

  73

  1,638

  75

  2,009

  60

  Staffordshire

  1,668

  84

  1,128

  65

  1,371

  68

  2,246

  46

  Suffolk

  1,364

  89

  831

  71

  1,086

  71

  1,772

  73

  Surrey

  2,156

  91

  1,136

  62

  1,178

  66

  2,078

  44

  Sussex

  3,062

  90

  1,745

  65

  2,692

  64

  3,820

  53

  Thames Valley

  5,049

  91

  4,214

  74

  4,352

  67

  7,651

  43

  Warwickshire

  584

  91

  505

  69

  553

  66

  1,129

  52

  West Mercia

  1,685

  91

  1,344

  77

  1,039

  74

  1,342

  56

  West Midlands

  4,640

  76

  6,111

  53

  5,609

  55

  8,293

  39

  West Yorkshire

  3,717

  70

  4,123

  71

  4,388

  73

  6,183

  64

  Fraud
  Mr. Cousins
  To ask the Secretary of State for the Home Department how many fraud cases were investigated in each police authority area in(a) 1979, (b) 1983, (c) 1987, (d) 1992 and (e) each year since 1995; what was the clear-up rate in each year; and what estimate he has made of the value of such fraud in each year since 1995. [129129]

  Mr. Charles Clarke
  Fraud offences comprise part of the offence group covering both fraud and forgery. The number of fraud and forgery offences recorded in the years requested in each police force, and the clear-up rate, are given in the tables.

  The counting rules for recorded crime changed from 1 April 1998. The effect on the number of fraud and forgery offences recorded was substantial, resulting in an estimated increase of 61 per cent. due to counting rules changes in England and Wales as a whole.

  The Economic Cost of Fraud, a report for the Home Office and the Serious Fraud Office, will be published by National Economic Research Associates (NERA) on Tuesday 11 July. The report will provide estimates of expenditure on investigations, court proceedings and preventative measures, and the amounts of money defrauded across all sectors of the economy, for the years 1997 and 1998.
  303W

  Fraud and forgery offences

  1979

  1983

  1987

  1992

  Police force

  Offences recorded

  Clear-up rate (%)

  Offences recorded

  Clear-up rate (%)

  Offences recorded

  Clear-up rate (%)

  Offences recorded

  Clear-up rate (%)

  Wiltshire

  1,046

  80

  1,023

  76

  851

  66

  1,711

  66

  Dyfed-Powys

  1,019

  96

  1,116

  93

  1,660

  91

  906

  79

  Gwent

  1,262

  96

  1,292

  91

  1,479

  92

  1,095

  72

  North Wales

  2,125

  90

  1,615

  85

  1,949

  87

  1,354

  66

  South Wales

  2,955

  92

  2,923

  83

  3,339

  74

  3,819

  43

  Total

  118,033

  82

  121,791

  69

  132,976

  67

  168,600

  53

  Fraud and forgery offences

  1995

  1996

  1997

  1998–99

  Police force

  Offences recorded

  Clear-up rate (%)

  Offences recorded

  Clear-up rate (%)

  Offences recorded

  Clear-up rate (%)

  Offences recorded

  Clear-up rate (%)

  Avon and Somerset

  4,017

  45

  4,293

  49

  3,584

  44

  9,950

  39

  Bedfordshire

  1,781

  37

  2,033

  49

  1,799

  41

  4,114

  27

  Cambridgeshire

  1,369

  41

  1,498

  44

  1,391

  42

  2,389

  42

  Cheshire

  2,639

  79

  2,359

  83

  1,845

  80

  2,146

  72

  Cleveland

  1,481

  53

  1,475

  46

  1,425

  34

  2,261

  41

  Cumbria

  930

  70

  995

  67

  1,099

  68

  1,388

  78

  Derbyshire

  1,399

  46

  1,355

  44

  1,308

  48

  4,200

  48

  Devon and Cornwall

  2,674

  57

  2,374

  59

  2,232

  59

  7,064

  47

  Dorset

  1,501

  68

  1,303

  64

  1,300

  65

  6,334

  51

  Durham

  1,661

  62

  1,279

  64

  1,163

  75

  1,311

  74

  Essex

  2,465

  42

  2,485

  41

  2,443

  44

  4,366

  41

  Gloucestershire

  1,986

  52

  1,652

  48

  1,517

  49

  2,527

  50

  Greater Manchester

  5,840

  48

  5,532

  42

  5,773

  39

  15,830

  41

  Hampshire

  3,892

  59

  3,907

  58

  3,781

  60

  5,130

  61

  Hertfordshire

  1,232

  47

  1,237

  47

  1,345

  39

  2,312

  46

  Humberside

  2,966

  52

  2,610

  44

  2,316

  55

  3,582

  54

  Kent

  3,627

  44

  3,155

  54

  2,932

  47

  5,687

  42

  Lancashire

  3,484

  77

  3,446

  73

  3,412

  70

  4,446

  63

  Leciestershire

  2,681

  47

  3,365

  52

  2,870

  46

  7,227

  39

  Lincolnshire

  1,163

  63

  1,148

  61

  1,382

  78

  2,723

  78

  City of London

  488

  51

  439

  54

  502

  42

  862

  36

  Merseyside

  4,259

  64

  4,288

  60

  4,269

  59

  4,884

  59

  Metropolitan police district

  32,838

  46

  38,983

  45

  42,687

  41

  80,541

  15

  Norfolk

  1,345

  62

  1,251

  62

  1,045

  74

  2,488

  63

  Northamptonshire

  1,217

  61

  1,246

  63

  1,266

  76

  4,425

  39

  Northumbria

  2,606

  43

  2,109

  44

  2,221

  46

  4,991

  58

  North Yorkshire

  1,032

  55

  1,052

  58

  980

  55

  2,563

  67

  Nottinghamshire

  3,701

  34

  3,352

  36

  2,874

  36

  4,736

  32

  South Yorkshire

  2,524

  35

  2,651

  32

  2,367

  40

  3,951

  59

  Staffordshire

  1,905

  46

  2,004

  50

  2,200

  55

  3,830

  44

  Suffolk

  1,243

  70

  1,333

  69

  1,116

  74

  2,099

  49

  Surrey

  1,442

  55

  1,389

  52

  1,332

  55

  2,994

  51

  Sussex

  2,763

  57

  2,815

  56

  2,994

  54

  7,790

  25

  Thames Valley

  4,732

  46

  4,551

  44

  4,174

  38

  11,778

  25

  Warwickshire

  901

  51

  975

  51

  898

  51

  2,401

  38

  West Mercia

  1,739

  50

  1,894

  44

  1,881

  39

  3,961

  57

  West Midlands

  7,624

  27

  6,365

  33

  4,844

  44

  15,675

  31

  West Yorkshire

  4,818

  55

  5,071

  55

  5,244

  55

  10,608

  45

  Wiltshire

  1,012

  63

  920

  56

  830

  53

  1,933

  56

  Dyfed-Powys

  577

  84

  604

  75

  482

  82

  1,402

  86

  Gwent

  933

  71

  1,305

  64

  1,415

  65

  2,395

  67

  North Wales

  1,130

  71

  1,022

  68

  844

  68

  1,869

  74

  South Wales

  3,399

  33

  3,105

  38

  3,016

  36

  6,340

  44

  Total

  133,016

  50

  136,225

  49

  134,398

  48

  279,503

  36

  Mr. Cousins
  To ask the Secretary of State for the Home Department how many cases of credit card fraud there have been in each year since 1995; what the clean up rate was in each year; and if he will make a statement on the outcome of his recent meeting with credit card systems and providers. [129128]
  304W
  Mr. Charles Clarke
  A separate recorded crime figure for cheque and credit card fraud has been collected since 1 April 1998. The number of offences in the year ending March 1999 was 141,948, with the clear-up rate for these offences being 31 per cent.
  305W
  On 27 June, I chaired a constructive and positive meeting with cheque and credit card systems providers, retailers and law enforcement agencies. The discussion was wide-ranging: information-sharing, cross-border co-operation, the European and international dimension to fraud, the role of law enforcement agencies, hotspots, education and training were all given serious consideration.

  It was agreed that, in addition to the work already being taken forward by the banking and retail industries on the development of new technologies, the Home Office would lead work on information sharing and the involvement of the relevant law enforcement agencies, with a particular remit to consider how to target and tackle hotspots. The group will reconvene in autumn to review progress.

  Restorative Justice
  Mr. Simon Hughes
  To ask the Secretary of State for the Home Department what plans he has to extend the use of restorative justice approaches for(a) young offenders and (b) adult offenders; and if he will make a statement. [128541]

  Mr. Charles Clarke
  For young offenders the final warning scheme, reparation order and action plan order under the Crime and Disorder Act 1998, were implemented across England and Wales on 1 June 2000; and the referral order under the Youth Justice and Criminal Evidence Act 1999 is being piloted in seven areas from summer 2000 ahead of national implementation. These measures reflect the restorative justice principles of responsibility, reparation and reintegration in tackling offending and requiring offenders to make amends for their actions. The Youth Justice Board for England and Wales is funding and evaluating a number of local schemes in support of these measures. For adult offenders, community service orders provide the opportunity for offenders to undertake work for the benefit of the community. In addition, a review of best practice, focused on restorative justice schemes for adult offenders, is being undertaken under the Government's crime reduction programme, on the basis of which further schemes may be funded and evaluated.

  Crime Statistics
  Mr. Simon Hughes
  To ask the Secretary of State for the Home Department what assessment he has made of the change in recorded crime rates over the last 10 years(a) in the United Kingdom and (b) in other European Union countries; and if he will make a statement. [128543]

  Mr. Charles Clarke
  Information covering recorded crime in all the European Union member states (including the parts of the United Kingdom) for the period 1988 to 1998 was published by the Home Office in the Statistical Bulletin 04/00, "International comparisons of criminal justice statistics 1998", on 22 February 2000. A copy is in the Library.

  Voice Tagging
  Mr. Simon Hughes
  To ask the Secretary of State for the Home Department if he will make a statement on the use of voice tagging; what pilot projects are being undertaken; what plans he has to extend the use of voice tagging. [129293]
  306W
  Mr. Boateng
  There are currently two pilots using voice verification technology being undertaken in England and Wales; the first is a pilot using VoiceTrack technology (which is licensed to Group 4 in the United Kingdom) and after an initial six month pilot in the Kent Probation Service region, they have been extended to cover the North Wales area. The Youth Justice Board is also undertaking pilots using a voice verification system developed by Group 4 with Kent and Medway Youth Offending Teams. The Board is currently in discussions about extending the pilots but there are no firm plans at present to extend either of them. Both of these pilots will be evaluated by the Home Office Research, Development and Statistics Directorate. No decision about whether to extend the pilots will be made until after they have been evaluated.

  Sexual Offences Review
  Miss Widdecombe
  To ask the Secretary of State for the Home Department if he will list the members of the External Reference Group of the Sexual Offences Review. [129363]

  Mr. Charles Clarke
  The membership of the External Reference Group of the Sex Offences Review was:

  Julie Barnard (Rape Crisis Federation) (from April to September 1999)

  Nick Bent (from May 1999)

  Mark Blake (Blackliners) (until December 1999)

  David Congdon (Mencap)

  Penny Dean (The Children's Society)

  Dina Gold (Board of Deputies of British Jews)

  Steve Hodges (NCH Action for Children) (from March until October 1999)

  Helen Jones (Rape Crisis Federation) (from September 1999)

  Dr. Liz Kelly, CBE (University of North London)

  Shaun Kelly (NCH Action for Children) (from November 1999)

  Dan Lambeth (Solicitor)

  Sandra McNeill (Campaign to End Rape)

  Anita Mansley (St. Mary's Sexual Assault Referral Centre, Manchester)

  Angela Mason, OBE (Stonewall)

  Deryk Mead (NCH Action for Children) (February 1999)

  Dr. Gillian Mezey (Royal College of Psychiatrists) (from July 1999)

  Margaret Pedler (Mind)

  Nerys Rees (Women's National Commission and Soroptimist International)

  Dr. Deborah Rogers (British Medical Association)

  Imam Dr. Abduljalil Sajid, JP (Muslim Council of Britain (from September 1999)

  Sara Swann (Barnardo's)

  Professor Jennifer Temkin (Department of Law, University of Sussex)

  Ruth Vincent (Association of Directors of Social Services) (from May 1999)

  David Watts (Essex Social Services) (from July 1999)

  Reverend Neil Whitehouse (Kairos in Soho and The Methodist Church)

  Claire Wilson-Thomas (CARE, Christian Action, Research and Education).

  Kosovan Humanitarian Evacuation Programme
  Mr. Paul Clark
  To ask the Secretary of State for the Home Department what plans he has to reimburse local authorities for their expenditure on the Kosovan Humanitarian Evacuation programme during the current financial year. [129759]

  Mr. Straw
  The arrangements for reimbursement are set out in Special Grant Report Number 68, which I have laid before Parliament today. The Report explains the areas of expenditure that will be eligible for the grant and invites local authorities to submit interim claims by 30 September. This will ensure the prompt repayment of the bulk of the expenditure incurred by local authorities during 2000–01.

  Immigration Adjudicators
  Mr. Cox
  To ask the Secretary of State for the Home Department how many immigration adjudicators come from an ethnic minority background. [128874]

  Mr. Lock
  I have been asked to reply.

  There are currently 43 full-time and 295 part-time immigration adjudicators. The ethnic background of the 43 full-time adjudicators is 29 white, three black, four Asian, and seven unknown or not specified. The ethnic background of the 295 part-time adjudicators is 199 white, nine black, 14 Asian, two Chinese, seven other and 64 unknown or not specified.

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Blackburn.): The LORD CHANCELLOR on the Woolsack.

Mobile Phones: Use While Driving
Lord Davies of Oldham: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare an interest as President of the Royal Society for the Prevention of Accidents.
The Question was as follows:
Whether, in the light of the Stewart report, Her Majesty's Government will introduce legislation to ban the use of mobile telephones while driving.
The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty): My Lords, the Government agree with the Stewart group's view that the use of mobile phones while driving can substantially increase the risk of an accident and that drivers should be dissuaded from using either hand-held or hands-free phones while on the move.
At present we share the view of the police that current legislation provides sufficient powers to prosecute irresponsible drivers. However, if drivers continue to use mobile phones while driving, the Government will review the case for specific legislation.
Lord Davies of Oldham: My Lords, I thank the Minister for that reply. Given that the Minister recognises the strength of the evidence in the Stewart report, and given the obvious substantial increase in the purchase and use of mobile phones by our fellow citizens, does he not recognise that the situation is bound to grow apace in terms of seriousness and that therefore the case for legislation to restrict the use of mobile phones while driving is enhanced?
Lord Whitty: My Lords, together with the police, we accept the view that the use of mobile phones, handheld or hands-free, does in different ways distract the driver. That could contribute to a loss of control and therefore be an offence under present legislation. The police believe that to define that offence specifically could be too prescriptive and could lead to other equivalent offences being downgraded. Nevertheless, I accept that this could be a growing problem. That is why we are keeping the matter under review; that is why we are assessing how the use of current powers affects the problem. My noble friend is right; it is a growing problem which is leading to an increasing number of accidents.
Baroness Thomas of Walliswood: My Lords, is it not true to say that the problem with using hand-held
1596
phones is that a conversation held with someone not in the car is much more distracting than a conversation held with a person who is in the car? Is it not also true to say that it is more distracting than almost anything else a human being can do while driving a motor car?
Noble Lords: Oh!
Baroness Thomas of Walliswood: I said "while driving", my Lords. Is the Minister aware that Canadian research—research into actual accidents—indicates that people using phones while driving are four times more likely to have an accident than people who are not using a car phone while driving?
Lord Whitty: My Lords, most of what the noble Baroness said is correct, although the imagination of the House was clearly ahead of her and me at one point. The evidence to which the noble Baroness referred, which is partly American evidence, indicates that there is a significantly higher danger of an accident in those circumstances. This applies in part also to hands-free phones because of the nature of the distraction of a conversation. Nevertheless, it is also true that equivalent problems such as eating, combing one's hair and generally waving one's arms about can equally lead to a loss of control. That is why the police believe that the general powers are sufficient and that those general powers would cover the use of mobile phones. I accept the advice of the police for the moment. We will see whether their powers prove to be adequate.
Lord Campbell of Croy: My Lords, when the Government are considering seriously the possibility of banning the use by drivers of hand-held telephones in cars, will they take into account the points that were made when I raised this subject on the first day of Questions in this Parliament three years ago? I received an encouraging reply from the noble Baroness, Lady Hayman, whom I am glad to see in her place, whose department also took the occasion to issue a press release, which was also satisfactory and encouraging. Does the Minister accept that this is a very serious question which needs consideration?
Lord Whitty: My Lords, I certainly accept that it is a serious situation. My noble friend Lady Hayman had anticipated the problem before mobile phones were as numerous as they are today. The department has continued to issue advice. Indeed, we are about to issue further advice on both hand-held and hands-free phones. In that advice we are supported by the police and, to a large extent, by the mobile phone companies themselves. We are continuing to warn against their use while driving. The police regard it as a major potential hazard, and the question of what is the appropriate legislation will be kept under review.
Lord Allen of Abbeydale: My Lords, how have other countries seen their way through these difficulties?

1597
Have they passed legislation making such conduct a criminal offence? I may be wrong, but I think that South Africa managed to do that.
Lord Whitty: My Lords, I am not sure of the situation in South Africa. There have been more prescriptive moves in some other countries, including, closer to home, in the Isle of Man. Our law is constructed in a somewhat different way. The more one specifies on the face of the Bill, the more it suggests that those issues which one does not specify are excluded from the general provision. That is why the police are cautious that if we prescribe the use of hand-held sets, that could restrict some other powers that they have over behaviour which loses control of the vehicle or distracts the driver.
Baroness Gould of Potternewton: My Lords, to whom will the advice to which the Minister has just referred be directed? I am disturbed by the radio "phone-in" programmes. The presenters know that they are talking to people who are on mobile phones but they encourage them to do so. Not only that, they ask them to hold on while a piece of music is played. I should have thought that could be stopped by advice to those people.
Lord Whitty: My Lords, I agree with my noble friend. Indeed, I recall a slightly bizarre episode when one radio station was covering this whole issue of mobile phones and five minutes later exactly the situation described by my noble friend Lady Gould occurred on the same station. I think that some direction needs to be given to everyone who uses a telephone as part of their professional life as well as to drivers directly. Many businesses tend to rely on their drivers ringing back to base. Very often they have not given those drivers sufficient instruction in terms of what they should do on the move and how they should pull over before engaging in a serious telephone conversation. Therefore, such instruction needs to be directed at radio stations certainly, but also at employers, businesses and individual drivers.

Fuel Poverty
3.9 p.m.
Lord Hardy of Wath Lord Hardy of Wath asked Her Majesty's Government:
Whether significant action has been taken to respond to the problem of fuel poverty.
Lord Whitty: My Lords, the Government have acted on the main causes of fuel poverty—poor energy efficiency and low income—by: cutting VAT on fuel and energy efficiency improvements; introducing the £150 winter fuel payment; acting to reduce domestic energy prices; allocating an additional £3.9 billion to social housing repair and improvement; introducing the affordable warmth programme and the New Home Energy Efficiency Scheme. The regulator has also
1598
extended the energy efficiency standards of performance schemes to include gas as well as electricity and has taken steps to ensure that most assistance is directed at low income households. An inter-ministerial group is reviewing the progress being made, the remaining scale of the problem and further measures that may be needed. The Government will then publish their fuel poverty strategy in the autumn.
Lord Hardy of Wath: My Lords, that Answer is rather commendable. Does it not suggest that the longterm disadvantage faced by many children as a result of living in very cold homes will be markedly reduced? Furthermore, are we not now on the verge of seeing an end to the incidence of hypothermia among the aged? In view of those improvements, is it not clear that this Government do make a difference?
Lord Whitty: My Lords, I agree absolutely with my noble friend on his final point. We have intensified our efforts in this area and have targeted a number of programmes, including the New HEES which is directed particularly at the elderly and families living in poverty. That will enable us more effectively to tackle the problems faced by those who are most vulnerable. We have made a substantial start and we shall ensure that the full strategy is built up so that it can make a significant contribution to the elimination of fuel poverty in this country.
Baroness Gardner of Parkes: My Lords, is it not a fact that many elderly people who suffer from hypothermia become ill not because they cannot afford adequate heating but because they feel they cannot, or they are worried about running out of money? When I served on the London Electricity Board, a scheme was put in place whereby we ensured that, for vulnerable people, one room was always kept warm, in whatever type of dwelling. Are similar schemes still available?
Lord Whitty: My Lords, the New HEES provides full heating, insulation and ventilation systems for vulnerable families, in particular pensioner families. It is quite true that a psychological element can play a part in this problem. However, the wide availability of such schemes helps to reassure older people that they can apply for assistance. We believe that at least half a million people could be taken out of fuel poverty by these means.
Lord Ezra: My Lords, while recognising the considerable efforts made by the Government to identify and deal with the problem of fuel poverty, I ask the Government whether they accept the recommendation made in the latest report of the Royal Commission on Environmental Pollution. It states that there is a,
"pressing need for further expansion of government programmes for raising energy efficiency and increasing warmth in low income homes".

1599
Furthermore, in the light of the consideration of the Utilities Bill, are the Government giving serious attention to some innovative schemes being introduced by various enterprises to reduce energy prices for low-income households?
Lord Whitty: My Lords, I can confirm that the Government recognise the need to tackle fuel efficiency in housing generally, because it forms a part of the climate change programme being examined by the Royal Commission. We also feel that a part of that priority should be to address first the problems faced by those who are most vulnerable to fuel poverty. Such cases form our highest priority. The programmes to which I referred earlier aim to tackle the priority areas first and will make a significant contribution both to the social need and the environmental issues here.
Lord Clark of Kempston: My Lords, does the Minister agree that the high fuel tax on petrol is causing considerable hardship—verging on poverty—for people living in rural areas? Have the Government any intention to reduce the fuel tax, in view of the promise given by the Government that taxes would not be raised in this Parliament?
Lord Whitty: My Lords, I believe that the noble Lord has mis-stated the taxation policy of this Government. We gave a clear commitment in relation to income tax. We also gave a commitment to ensure that our taxation system would be environmentally sensitive. The taxation structure put in place in relation to fuels aims to meet that objective. We have built on the fuel duty escalator put in place by the previous government. But when it began to bear too heavily on road users, the Chancellor in his Budget ended it. However, since that was done, international oil prices have risen sharply. The proportion of tax as an element of the price of fuel is in fact slightly lower than it was when the Government first came to power. Furthermore, up to that point, the real cost of motoring had not risen significantly for a period of 20 years. For those reasons, we do not regard this as an area for immediate government action, although we shall continue to bear in mind the implications as regards rural policies.
Baroness Gale: My Lords, can the Minister tell the House whether the inter-ministerial group on fuel poverty has completed its deliberations on a possible definition of fuel-poor households?
Lord Whitty: My Lords, in preparation for drawing up the strategy, which we hope to issue in the autumn, the inter-ministerial group has carefully considered the definition. However, I should point out to my noble friend that the definitions will apply to England. The commonly applied definition of a fuel-poor household is of one which needs to spend 10 per cent or more of its total income on fuel. However, queries have been raised as regards whether fuel for non-heating purposes should be excluded and whether some allowance should be made for housing costs when
1600
calculating household incomes. The inter-ministerial group feels that it should retain the previous definition. However, it also believes that some merit may be gained by indicating the effects of allowing for those other costs through housing benefit or income support for mortgage interest, which are currently excluded. That would show the varying effects of different definitions. However, for prime policy purposes, we shall retain the existing definition.

Cameroon Republic: Human Rights
3.16 p.m.
Lord Thomson of Monifieth Lord Thomson of Monifieth asked Her Majesty's Government:
Whether they will consult other Commonwealth governments about action to ensure that the human rights provisions of the Harare Declaration are being observed in relation to the Anglophone minority in the Cameroon Republic.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Scotland of Asthal): My Lords, we are concerned about Cameroon's human rights record and are keen to ensure that the provisions for human rights laid down in the Harare Declaration are respected by the Cameroonian Government with equal consideration for all Cameroonians. We have raised Cameroon's human rights record with other Commonwealth governments and with the government of Cameroon.
Lord Thomson of Monifieth: My Lords, I thank the Minister most warmly for the constructive tone of that reply. However, is she aware that the difficulties suffered by the rather substantial English-speaking minority in Cameroon have now lasted for many years? Attention has been drawn continuously to those issues by the human rights committees of the United Nations. Is the Minister further aware that this country has a considerable moral obligation in this regard? We were the trusteeship power for the southern Cameroonians under the treaty of the League of Nations and later under the United Nations. We were also principally responsible for the arrangements under which the southern Cameroonians joined the Republic of Cameroon. Therefore, using the machinery of the Commonwealth, can the Government ensure that they increase their efforts, bearing in mind that grave reservations were expressed when the Republic of Cameroon was accepted into the Commonwealth, thus acknowledging its obligations under the Harare Declaration?
Baroness Scotland of Asthal: My Lords, I am aware of the matters raised by the noble Lord. It is right to say that acute concerns have been expressed about how the Anglophone Cameroonians are being treated. It is a matter that has rightly been highlighted by Her Majesty's Government. We have held discussions with

1601
our other Commonwealth partners, in particular in relation to this matter, and we shall continue to give it a great deal of attention.
Baroness Rawlings: My Lords, can the Minister give the House details of any other countries that come under the human rights provisions of the Harare Declaration where the Government are not satisfied that the provisions are being properly observed?
Baroness Scotland of Asthal: My Lords, the noble Baroness will know that in the past we have had certain difficulties with the record of a number of countries that have signed the Harare Declaration. It would be invidious to name them, because many of those countries have now resolved their problems. However, I can tell the noble Baroness that the Harare principles are still considered to be extremely important. Her Majesty's Government will ensure that they highlight every occasion on which they feel that those principles are not being adhered to appropriately.
Lord Wright of Richmond: My Lords, I fully share the concerns expressed about human rights in Cameroon. Nevertheless, does the Minister agree that it is a considerable compliment to the Commonwealth that Francophone Cameroon and Lusophone Mozambique have both joined? Can the Minister say anything about other applicants, such as Yemen or the Palestine Liberation Organisation?
Baroness Scotland of Asthal: My Lords, I cannot comment specifically on the noble Lord's final point. I agree that it is a very great compliment that a Francophone country such as Cameroon has chosen to join the Commonwealth. Joining the Commonwealth is of great benefit. We are able to intensify the discussions that we have with such countries. We are also able to help them in a material way. At a meeting on 2nd May, CMAG agreed to send a secretariat mission to examine human rights issues in Cameroon, and it has recently agreed to accept such a commission. Those are the kinds of issue that we are able to discuss with member countries.
Lord Avebury: My Lords, I am glad to hear that the Commonwealth Ministerial Action Group is sending a mission to Cameroon. In addition to the matters raised by my noble friend, will the Government take into consideration the recent report by the UN rapporteur on torture, Sir Nigel Rodley, which highlighted extra-judicial executions, particularly in the north, unfair trials before military tribunals, and the persecution and harassment of journalists and human rights defenders?
Baroness Scotland of Asthal: My Lords, we certainly shall. Her Majesty's Government have been keen to discuss the report with international partners in order to raise the profile of Cameroon's poor human rights record. We shall use the report to underline our concerns about Cameroon. Her Majesty's
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Government have expressed concern about the treatment of the north-west detainees who were held for two years without trial in appalling prison conditions. Seven died in detention, and the High Commission followed closely the military tribunal of each of the detainees. We were concerned about well-documented claims of torture in detention and the use of hearsay evidence. For all those reasons, we have been clear that this is an issue that we shall continue to highlight. We shall attempt to bring about some positive movement.

House of Lords Reform: Joint Committee
3.22 p.m.
Baroness Miller of Hendon Baroness Miller of Hendon asked Her Majesty's Government:
Whether the proposed Joint Committee on the parliamentary aspects of reform of the House of Lords will be able to consider the composition of the House.
The Lord Privy Seal (Baroness Jay of Paddington): My Lords, it is the Government's view that the terms of reference of the Joint Committee should not include consideration of the composition of the second Chamber, which has already been fully considered by the Royal Commission chaired by the noble Lord, Lord Wakeham. The Government see the function of the Joint Committee as being to consider in detail how the two Houses of Parliament should work together in the future. The exact terms of reference will be discussed through the usual channels and will be put before both Houses in due course.
Baroness Miller of Hendon: My Lords, I thank the noble Baroness for that Answer. However, I must ask her: why not? It seems incredible that the composition of this House may not be discussed by the Joint Committee of both Houses. Is this simply another example of the Government's policy of taking matters away from Parliament? This should be a matter for Parliament to decide. The matter of the Royal Commission report did not seem to be completely resolved.
Baroness Jay of Paddington: My Lords, as I hope I made clear in the final sentence of my original Answer, the exact terms of reference for the Joint Committee will be discussed, no doubt in some detail, through the usual channels. Approaches have already been made to start that process. The Government believe that time was well spent by the noble Lord, Lord Wakeham, and his colleagues in considering a wide range of issues relating both to the composition of this House and to other matters affecting its future. Some matters relating to the workings of both Houses were unresolved. As we have said consistently since the publication of the White Paper on reform of this House in January 1999, it would be appropriate for these to be considered by a Joint Committee.
Lord Strathclyde: My Lords, the noble Baroness the Leader of the House has re-confirmed that the Joint

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Committee will not be allowed to debate the composition of this House. That is because the Government have already decided that one of the three Wakeham options will be the one that the Government prefer. That being the case, if the noble Baroness cannot tell us today which of those options has been decided upon, when will the Government be able to announce it to Parliament and to the nation?
Baroness Jay of Paddington: My Lords, I do not intend to be driven into a commitment on a time-frame for that decision. The noble Lord is well aware that it is a matter for ongoing discussion by the Government. I point out to the noble Lord, and to the noble Baroness on the basis of her supplementary question, that a huge number of issues relating to the future of this House and its relationship with another place do not depend on legislative change: for example, the recommendations made by the noble Lord, Lord Wakeham, in relation to the deregulation and scrutiny committee; the idea for a new constitutional committee, which has already been adopted in principle by this House; the concerns highlighted by the noble Lord, Lord Wakeham, and his colleagues in regard to particular changes; and conciliation procedures between the two Houses where there is disagreement. These are fundamental and important matters which are legitimately to be looked at by a parliamentary process and which are precisely relevant to the development of the work of this House. They do not impact on or reflect the positions regarding composition suggested by the noble Lord, Lord Wakeham. Those will be a matter for legislation in due time. When those legislative matters are to be announced, I assure your Lordships that we shall bring them first to this House.
Lord Rodgers of Quarry Bank: My Lords, there appears to be a degree of confusion in what the noble Baroness has told the House. As I understood it, she said that the committee's terms of reference were open to discussion; but at the same time, she closed the door on the terms of reference covering composition. If I am wrong about that, perhaps she will be kind enough to explain exactly where we stand. Secondly, a number of the Wakeham Commission recommendations can be implemented by this House without legislation and without reference to another place. I had assumed, and perhaps the noble Baroness will confirm this, that we could progress with those, irrespective of the appointment of the committee. Thirdly, is it not the case that, where hitherto we have spoken of two-stage reform—and on these Benches we have accepted that as a necessity—what the Leader of the House now proposes within the terms of reference that she has in mind is not two-stage reform of the Lords, but three-stage reform, or perhaps even a more extended period to get matters absolutely right?
Baroness Jay of Paddington: My Lords, I am not sure about two, three or any number of stages. I have always rather resisted that approach to reform of this House. On the noble Lord's first point, we may be too involved in semantics. In my initial Answer to the
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noble Baroness, I said that, consistent with the position that the Government have taken for the past 18 months, since the appearance of the White Paper on reform of this House, there are parliamentary aspects that need to be discussed by a Joint Committee. I have said that the remit that the Government see for that committee should exactly reflect those parliamentary aspects. In my supplementary answer to the noble Baroness I attempted to expand on some of the matters that might legitimately be considered. I do not think that there is any inconsistency between that and saying that the terms of reference are obviously matters which need to be discussed between the usual channels. Again to repeat my original reply, those will eventually have to be put before both Houses.
Lord Dubs: My Lords, does my noble friend agree that if the Joint Committee were to look at all the Wakeham proposals again, we should simply have a Wakeham Mark 2, and that would surely delay progress rather than enhance it? Is not the right approach for this House and the other place to discuss the Government's response to Wakeham when that is known?
Baroness Jay of Paddington: Yes, my Lords, I agree with my noble friend. In a broader context, it surprises me slightly that there should be a somewhat negative reaction to the announcement of the establishment of the Joint Committee from those who previously urged the Government, rightly, to make progress on this matter. We intend to make progress. To take what might be another very long period to reconsider the whole of the Wakeham proposals and the Wakeham remit would delay matters in precisely the way my noble friend described.
Lord Craig of Radley: My Lords, is the Leader of the House able to give any indication as to when the Joint Committee will begin its work?
Baroness Jay of Paddington: My Lords, as I said on Monday of this week in response to a Question for Written Answer tabled by my noble friend Lord Acton, we hope to be able to agree both the terms of reference and the membership of the Joint Committee either shortly after the Summer Recess or during the spill-over period. I cannot give a precise date for the commencement of the work of the Joint Committee. However, as I said in reply to my noble friend Lord Dubs, it is the intention of the Government to move forward as quickly as possible and the Joint Committee is the next step in the process.
Lord Renton: My Lords, will the Government continue to resist any suggestion that this House should become an elected Chamber which would turn it into a mere party-political body, or microcosm of another place, and, above all, deprive us of the valuable presence of the Cross-Bench Peers?
Baroness Jay of Paddington: My Lords, I am grateful to the noble Lord. He will be aware that part

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of the evidence of the Labour Party to the Royal Commission, which was included in our response to the recommendations of the noble Lord, Lord Wakeham, was that there should not be a second Chamber that was a replica of the other place. That was the reason why we were attracted to some of the proposals of the noble Lord, Lord Wakeham, which included what I describe in shorthand as a mixed House. We have also re-emphasised at every possible opportunity our enthusiasm for the continued presence of the Cross-Benchers.

Transport Bill
3.31 p.m.
The Minister of State, Department of the Environment, Transport and the Regions (Lord Macdonald of Tradeston): My Lords, I beg to move that the House do now resolve itself into Committee (on Recommitment) on this Bill.
Moved, That the House do now resolve itself into Committee (on Recommitment).—(Lord Macdonald of Tradeston.)
On Question, Motion agreed to.
House in Committee (on Recommitment) accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Clause 1 [Secretary of State's general duty]:
The Earl of Caithness The Earl of Caithness moved Amendment No. Al:
Page L line 10. at beginning insert ("Subject to the provisions of any international agreement on air traffic services,").
The noble Earl said: I rise to move Amendment No. A 1. I apologise to the Committee, the Minister and the Fifth Cavalry that supports him—a fine body of men and women I know well from the past—for the lateness of this amendment. There has been a total misunderstanding. It was always supposed to be an amendment but it is stated on the Marshalled List that I intend to oppose that Clause 1 stand part of the Bill. I shall not do so. I apologise to the Committee for any misunderstanding. In view of that and my desire that the Minister should understand the purport of my amendment, yesterday I telephoned his office to explain that my interest was the legal basis for the partial privatisation of NATS. That is a very different topic from the other amendments with which my amendment is now grouped. I am surprised that I was not consulted on the point by the Government Chief Whip so that the Committee's task would be easier rather than that a number of different amendments should be grouped with it.
The reason for tabling the amendment is that in 1993 when I was Minister of Aviation I looked at the possibility of introducing private finance into NATS. The advice that I received then was that it was not legally possible to bring private finance into NATS because by international conventions to which the United Kingdom was a party NATS had to be a
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non-profit-making organisation. Therefore, the introduction of any private finance meant that it would have to make a profit. The question that I put to the Minister is: what has changed, and why is he now allowed to do something that I wanted to do seven years ago? I beg to move.
The Chairman of Committees (Lord Boston of Faversham): Amendments Nos. 8 and 9 are grouped with this amendment. I must point out to the Committee that if Amendment No. 8 is agreed to I cannot call Amendment No. 9.
Lord Brabazon of Tara: Amendments Nos. 8 and 16 in my name have been grouped with this amendment. As my noble friend said, they deal with a completely different subject. Therefore, it may be better if at this stage the Minister responds to the amendment moved by my noble friend Lord Caithness. We can then speak to some of the other amendments in the group.
Lord Macdonald of Tradeston: The Committee will be aware that Clauses 1 and 2 set out the general duties of the Secretary of State and the Civil Aviation Authority respectively. They require the Secretary of State and the CAA to exercise their Chapter I functions in the manner that they think is best calculated to further their duties. Amendment No. A1 in the name of the noble Earl would add a proviso to the effect that the Secretary of State's discharge of his general duties should be subject to the UK's international agreements.
There is nothing in international law which would preclude the delivery of our air traffic services through a private sector company. We have taken care to make the International Civil Aviation Organisation (ICAO)—the "keepers" of the Chicago Convention—the European Commission and Eurocontrol aware of our plans.
The Committee will be aware that the noble Earl, Lord Caithness, was at one time the Minister of Aviation. I assume that at the centre of the noble Earl's concern is the Eurocontrol charging principles which govern how charges for en route air navigation services are calculated and collected. I understand that until the 1990s the charging principles were based on full cost recovery, and no more than that, which would certainly constrain the ability of a private sector provider to make a profit. The charging principles were subsequently amended to permit a provider to recover a return on capital employed; in other words, cost pass-through plus.
The principles have been further amended as recently as last year so that it is now permissible for a provider to be regulated by the RPI-X method, which is how we intend NATS to be regulated. I can assure the noble Earl that there is no incompatibility between our proposals and the UK's international obligations and that the Government will at all times act in a manner consistent with those obligations.
Lord Brabazon of Tara: Before my noble friend responds, perhaps I may speak briefly to the two

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amendments in this group in my name, Amendments Nos. 8 and 16. Both amendments deal with that part of the Bill which is concerned with the duties of the Secretary of State and the Civil Aviation Authority. The same point is made in both amendments but one is concerned with the Secretary of State and the other with the Civil Aviation Authority.
Clause 1(3) allows the Secretary of State to promote competition to further the interests of the air industry and the travelling public only where he thinks it appropriate. My amendments remove that qualification of appropriateness. We do not believe that there is need for it. The benefits of competition in securing cost-effective and high quality services are well established. Securing those benefits should not be left to the whim of the Secretary of State or the CAA. If the interests of the public and others are best secured by promoting competition, this is the route the Secretary of State and the CAA should be obliged to take. The public interest is well protected by the need to promote competition only where it furthers the interests set out in the clause.
Lord Macdonald of Tradeston: The noble Lord returns, in Amendments Nos. 8 and 16, to the question of the discretion of the Secretary of State and of the CAA. Clauses 1(1)(a) and 2(1)(a) require the Secretary of State and the CAA to further the interests of users. The ways in which this may be done explicitly include promoting competition where they think it appropriate.
The Government are in favour of competition and we want to see it promoted wherever appropriate. But the provision of en route air traffic services, which is our main concern here, has many of the characteristics of a natural monopoly, and the potential for competition is further constrained by existing technology. There is competition in some parts of the air traffic services market but, for good reasons of safety, we cannot have rival providers offering services in the same airspace at the same time. With current technology, the start-up costs of providing en route services mean that competition even for that particular market is not presently feasible.
Competition will be given due weight by the Secretary of State and the CAA but "furthering the interests of users" can take many forms and there is no "one size fits all" solution to every situation.
3.45 p.m.
The Earl of Caithness: I am grateful to the Minister for the way in which he answered my amendment; and to the Committee for helpfully and constructively enabling my noble friend Lord Brabazon to speak to his amendments after the noble Lord had answered my point.
I am grateful to the Minister for his full answer. All I cart say is how pleased I am that the ideas and principles of the previous Conservative government continue to prove fruitful throughout the world. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 1 not moved.]
Lord Trefgarne Lord Trefgarne moved Amendment No. 2:
Page 1, line 12. after ("aircraft") insert (", whether or not operated for the purposes of hire and reward,").
The noble Lord said: In moving this amendment, I speak also to Amendment No. 13. My amendments are grouped with others. No doubt noble Lords responsible for tabling those amendments will wish to speak to them.
I declare an interest. I have been involved in general aviation and other categories of aviation for most of my working life. Today I speak about general aviation. It is my experience in that regard that I wish to represent to the Committee. I am an office bearer of the Popular Flying Association. I am the part-owner of a small aircraft involved in these regulations and rules and would not wish Members of the Committee to be unaware of those matters.
Ever since the prospect of some form of privatisation of NATS, there has been concern among the general aviation community that its interests would not be adequately represented. Until now, by and large general aviation has been able to co-exist with professional or transport aviation satisfactorily. Of course, around major aerodromes—for example, Heathrow and Gatwick—there are strict rules as to what small aeroplanes can do; and they have to comply with those rules if they are to approach those airports.
That is all well understood and accepted. Of course, there is discussion about the nature of the rules and the extent of the airspace so regulated. However, it is feared by the general aviation community, and by me, that if NATS becomes more concerned, and more required to take account of financial considerations, the first facilities to be squeezed will be those which provide for the smaller aircraft. I am sorry to say that there is some evidence that that is occurring already. I give the Committee some examples.
There are strict rules about aircraft movements around Heathrow and Gatwick. Those aerodromes are surrounded by class A airspace. Light aircraft may only approach, with permission, when the weather is suitable and in accordance with special VFR. clearances. The controllers around Heathrow and Gatwick could not be more helpful to small aeroplanes—but, of course, within the constraints imposed on them by other aircraft.
By contrast, Stansted is quite different. The airspace around Stansted is class D which is more liberally regulated than the airspaces around Heathrow and Gatwick because Stansted is a less busy airport. But the application of the rules around Stansted is onerous. For reasons quite unknown to general aviation, clearances to enter that airspace are almost always refused. I speak from personal experience in the matter.
A year or so ago I was flying from, I think, Cambridge back to an aerodrome in the south of London. I am sorry that the noble and gallant Lord, Lord Bramall, is not in his place; he was my co-pilot. The controllers around Stansted refused even to

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entertain application for clearance on a gloriously sunny evening. They were not busy. To this day I do not know why they could not have been more accommodating.
My experience is not unique. I am told by those who have aeroplanes operating regularly in that area that the Stansted controllers are uniquely difficult when it comes to granting clearance for small aircraft to enter their loosely regulated airspace. They repeatedly say, "No, you may not enter. Go round". In my opinion there is absolutely no reason for saying that. There may well be some reason; I suspect that it is because the number of controllers and the facilities available to them have been reduced so that they simply do not have the capability. Why that should be so when the controllers around Heathrow and Gatwick are not faced with these difficulties, I cannot imagine.
Lord Brett: Did the noble Lord raise this issue at the time with the Civil Aviation Authority or National Air Traffic Services?
Lord Trefgarne: I confess that I did not write a letter to the chairman of NATS at the time. I am not sure whether he would want to bother himself with letters from individual pilots.
Lord Clinton-Davis: The noble Lord makes a point of generality. He must not do that unless he feels that there is a case where a difference of rule is being applied at Stansted from that at Gatwick and Heathrow. If so, it is a serious matter and it is incumbent not only on the noble Lord but also on others to ensure that that point of view is made clear to NATS and to the Civil Aviation Authority.
Lord Trefgarne: I can assure both noble Lords that the point I make has been represented to NATS over and over again. In answer to the earlier intervention, I confess that it is not my representations to NATS that I wish to take into account. I believe that the problem is caused by financial considerations imposed by NATS which will be made worse by the provisions of the Bill. My amendment asks the CAA and the Secretary of State to have regard to the needs of those whose aircraft are operated other than for the purposes of hire and reward. I hope that it will address the problem.
I give Stansted as an example but no doubt there are others. NATS does not provide air traffic services for all aerodromes but it does operate in many around the country. The services at Luton, which is nearby, are not provided by NATS but those at Heathrow, Gatwick and Stansted are. Heathrow and Gatwick appear to operate entirely satisfactorily and without difficulty as regards general aviation. By contrast, Stansted does not. I do not know the reason and I hope that the Minister does.
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I hope that we can impose appropriate duties on the CAA and the Secretary of State which will ensure that they have regard to the interests of the users of small aircraft. I beg to move.
Viscount Goschen: I support the amendment moved by my noble friend Lord Trefgarne. I, too, have tabled amendments in this group. They are all aimed at ensuring that the interests of general aviation are properly taken into account by the Government, by the Civil Aviation Authority and by the licensee, whoever that may be.
I must begin by declaring an interest as the holder of a private pilot's licence and the owner of a rather aged aircraft.
The points raised by my noble friend Lord Trefgarne in relation to Stansted were good examples of the concerns of the general aviation community. We should not underestimate the importance of general aviation to this country. Together with military training, GA is responsible for the new generation of pilots taking up employment with airlines and air taxi firms, becoming instructors and sometimes going on to fly for the Armed Forces.
This country has a strong reputation in the aviation industry; indeed, I believe that we are world leaders. I also believe that we are well served by the CAA and by NATS. All categories of aircraft and pilots receive good service from the air traffic controllers and NATS has a high reputation in that regard. However, the proposals in the Bill make fundamental changes to the way in which air traffic control services are delivered within this country.
My amendments and those moved by my noble friend would ensure that the Government take full account of the needs of general aviation. The issue, which may seem merely a technical one related to access to Class D airspace, can be summarised simply. All pilots recognise that, where appropriate, they must take control from air traffic controllers. They look to the controllers to offer them fair access when that is safe and appropriate. The system has always worked well within the United Kingdom.
However, responsible bodies, such as those which represent pilots of light aircraft, gliders and hang gliders and all other flying interests, are concerned that, unless strict safeguards are included in the new arrangements, their interests might be put to one side. They are concerned that the licensee might consider general aviation to be an irritation which should take second place to commercial aviation. I do not believe that there are legitimate grounds for a dispute. The Civil Aviation Authority and NATS recognise the importance of GA. With the exception of Stansted, the balance as it is currently struck seems to work well.
Under the new arrangements, the current duties of the Director of Airspace Policy will be subsumed within the Civil Aviation Authority. The licensee—the new NATS company and operator of the air traffic control services—will be obliged to perform under the licence given to it by the Civil Aviation Authority. However, if the CAA decides that a particular piece of

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airspace should be given a particular classification, it should be made clear that it is the duty of the licensee to administer that airspace accordingly. The CAA, having taken into account safety issues, the level of traffic and all the representations made to it, will have given a classification and the airspace should be administered accordingly.
I hope that the Minister will give the Committee and aviators at large some comfort. I also hope that he considers general aviation to be important and that it should be treated fairly. The Bill should provide the CAA with a duty to have due regard to the interests of general aviation and the power to ensure that the licensee administers the airspace in accordance with its classification.
My Amendment No. 102 ensures that, in taking those matters into account, the CAA has regard not only to the type of aircraft but also to the type of aviator. The two are not one and the same because one type of aircraft might be used for professional or private purposes or for training. Therefore, I hope that my small and modest amendment is acceptable to the Minister. No doubt my drafting is in error and his will be superior, but I hope that he can give the Committee a strong assurance.
The Viscount of Oxfuird: I support the amendment tabled by my noble friend Lord Trefgarne. I, too, have been involved in aviation; both I and my father have flown aircraft. I believe that it is vital to have as free access as possible to the air traffic control system.
I remember being short of fuel while flying over France and having to make an emergency landing at Bentwaters. That was facilitated by our good liaison with the American Air Force which owned the base. The feeling of relief when I landed, having been controlled totally throughout that period, was an endless pleasure. That was despite the fact that, having parked the aircraft, someone approached me with a machine gun and asked me who I was! That had nothing to do with the incident.
General aviation has a strong place in this country. It always has had and it must be respected and protected.
Lord Brabazon of Tara: I do not have an interest to declare in this matter, although it might be argued that I should have. However, I have received a letter from the Aircraft Owners and Pilots Association which echoes the concerns expressed by my noble friends. Until I received the letter, I was unaware that there are more than 8,500 general aviation aircraft in this country, excluding microlights and gliders. I also understand that the gliding community is concerned about some of the aspects of the Bill.
The main concern of the Aircraft Owners and Pilots Association relates to the duties of the Director of Airspace Policy. In particular, the Bill clearly sets out what the Government expect from the DAP in relation to the use of any particular airspace or of airspace generally. While it is the DAP's belief that those are sensible provisions, and it is right that they should be
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included in the Bill, what is missing gives cause for concern. It is my belief that the CAA and the DAP will be able to meet the Government's requirements only if they have the necessary regulatory powers. At present, there is nothing in the Bill or elsewhere which provides the CAA with such powers.
I ask the Minister to take account of those concerns and to note the position of general aviation. I also ask for an assurance from the Government that there will be continued free access to the UK airspace system for general aviation. And I ask the Minister to explain how the regulator—the DAP—can exercise his duties without regulatory powers. I also hope that the Minister can give me an assurance that the air navigation order will be amended to provide the DAP with regulatory powers in a timely manner so that it coincides with whatever happens in the future with regard to national air traffic services.
4 p.m.
Lord Macdonald of Tradeston: The noble Lord, Lord Trefgarne, made a point about Stansted which I shall certainly note. Through Amendments Nos. 2 and 13 he seeks to have it stated explicitly that the duty of the Secretary of State and the CAA is to further the interests of users of air traffic services, and that extends to leisure flyers.
We believe that the phrase,
"operators and owners of aircraft",
is in no way limited to commercial flyers. It embraces all and any owner or operator of all and any type of aircraft, and thus encompasses both commercial and leisure flyers. However, the drafting that we have already amply covers the point on which the noble Lord seeks reassurance. Therefore, I believe that the noble Lord's amendments are unnecessary.
With regard to Amendment No. 102, to which the noble Viscount, Lord Goschen, spoke so persuasively, Clause 70(1)(b) provides that the CAA must exercise its air navigation functions in the manner it considers is best calculated to satisfy the requirements of operators and owners, again, of all classes of aircraft. Amendment No. 102 seeks to widen the description of those whose requirements the CAA must satisfy to include all classes of aircraft user.
I recognise the point that the noble Viscount makes. We appreciate that it is important that the interests of the general aviation community and, indeed, of all categories of user are taken into account. We have touched already on the importance of continuing to ensure that there is no discrimination between different classes of user of air traffic services. It is not part of our intention in the Bill to create an adverse impact for anyone involved in aviation. We expect the CAA, in the exercise of its air navigation functions, to look after general aviation alongside commercial, military and other interests.
I believe that that is the assurance which the noble Viscount seeks and I am very happy to give it. However, the point is already provided for in the Bill. In addition to Clause 70(1)(b), to which I referred just now and which deals with the requirements of

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operators and owners, there is also a requirement in Clause 70(1)(c) for the Civil Aviation Authority to take account of the interests of any other person in relation to the use of airspace. I am confident that the interests of all classes of user, and quite clearly those in general aviation, are protected by the duties laid on the CAA by this clause. Therefore, I feel that the noble Viscount's amendment may also be unnecessary.
Viscount Goschen: I thank the Minister for his helpful and warmly received reassurances. However, the point that I was driving at is very much the same one as was made by the Minister. It is simply that his point is not reflected in the drafting of the Bill. With my amendment, it would be. Clause 70(1)(b) states,
"to satisfy the requirements of operators and owners of all classes of aircraft".
Therefore, it is the class of aircraft that is being used as the distinguishing factor, and, indeed, it is a valid distinguishing factor. However, if one goes to the trouble of saying "all classes of aircraft", then another distinguishing factor is "all classes of user" because the users vary in class as much as do the aircraft. Therefore, given that the Minister has in effect conceded the point (I believe appropriately), I wonder whether he will again discuss with his officials whether the drafting that I have suggested, or something like it, which makes reference not only to the class of aircraft but to the class of user, makes sense and amplifies the point that he himself was trying to make.
Lord Macdonald of Tradeston: I shall certainly reflect on what has been said. In response to questions raised regarding the enforcement of powers of the Director of Airspace Policy, we have discussed that issue with the CAA. Indeed, we recognise that under the new regime it is a crucial area of the DAP's role. However, we do not see a need to make additional powers in primary legislation.
We believe that the provisions of the Bill, together with the powers provided by Section 60 of the Civil Aviation Act 1982, which enabled provision to be made generally for regulating air navigation in an air navigation order, are adequate tools to secure the DAP's role. Indeed, at present the CAA is considering what amendments it requires to the ANO, and we expect it to consult shortly on its proposals.
The noble Lord, Lord Brabazon, raised the question of enforcement of the DAP's powers. As I said, it is an issue which has been under discussion. There are crucial areas in that regard that are of course relevant in the new regime. However, I believe that the provisions of the Bill, together with the powers already provided for by Section 60, should provide the necessary provisions for general regulation of air navigation through air navigation orders. We believe that those tools are adequate to secure the DAP's role; indeed, as I said, the CAA is at present looking at
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amendments that might be necessary. Therefore, I hope that that satisfies the noble Lord's concern and that he will withdraw the amendment.
Viscount Goschen: I apologise to the Committee. Before my noble friend Lord Trefgarne tells the Committee what he intends to do with his amendment, I should be grateful if the Minister could explain how that would work in practice.
I listened with great interest to the description that he gave to the Committee of the dialogue between the Civil Aviation Authority and his department on this issue. I welcome the fact that that has taken place. It seems a sensible way forward and is a recognition of a potential problem. However, if the Bill is enacted in the form in which your Lordships currently find it and a licensee is given a piece of airspace to administer—perhaps a Class D piece of airspace—and the licensee refuses to administer it in the appropriate manner in accordance with its classification, can the noble Lord explain how amendments to the ANO would take effect? Would the CAA be given the teeth that it really requires?
Lord Macdonald of Tradeston: We believe that the teeth are already in the legislation which we shall provide. I believe that it is entirely understandable that Members of the Committee wish to know how enforcement of those functions fit together. However, with regard to Clause 8 duties and licence conditions, Clauses 20 to 25 make provision for the enforcement by the CAA of the licence holder's statutory duties under the Bill and the conditions of the licence. We also believe that those clauses will provide for the CAA to make orders which will be binding on the licence holder, not only in this case where there might be a contravention, as has been suggested, but in other circumstances, too.
The kind of licence provisions which may be of particular interest to the noble Viscount, Lord Goschen, might include a general obligation on the licensee to provide services in a way which does not duly discriminate against or give preferential treatment to any class of user. We intend that there shall be no undue discrimination. Where measures are necessary in order to make the optimum use of airspace to maintain the most expeditious flow of air traffic as a whole, the CAA will decide what is and what is not appropriate. An obligation on the licence holder to obtain the CAA's consent is also important in a number of areas. We shall insert a requirement for NATS to notify the CAA before it takes any action, for example, with regard to disposal of navigational assets. I hope that some of those licence provisions are relevant to the issues that the noble Viscount had in mind.
Lord Trefgarne: Before I withdraw my amendment, which I am minded to do, I hope that the Minister will not mind if I press him a little more on the example that I gave. It was meant to be only an example, but I fear that it is a glaring example of a failure of the present system. I apologise for having to put this in plain

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terms, but the service provided by controllers to general aviation in the area of Stansted is below an acceptable standard, unlike the service provided around Heathrow and Gatwick. If the Minister will undertake to look into that and write to me, I shall be happy to withdraw my amendment.
Lord Macdonald of Tradeston: The CAA and director of airspace policy have been considering further particulars about access for general aviation to the Stansted airport control zone. I shall certainly consider it too, because it has been raised with my officials as part of our dialogue on how airspace policy decisions can best be enforced. It is a good example and we shall consider it carefully—all the more so in the light of what the noble Viscount, Lord Goschen, has said. As I have said, the airspace policy will continue to be applied even-handedly and with sufficient vigour to protect the interests of all users in the Stansted control zone and elsewhere. To amplify my reply to the noble Viscount, Lord Goschen, we have the powers of direction in the air navigation orders to enable the CAA to instruct the licence holders or other providers to do what is necessary to maintain services for all types of fliers.
Lord Trefgarne: The Minister says that consideration has been given to that problem. If he will undertake to write to me at the outcome of that consideration, I shall be happy to withdraw my amendment.
Lord Macdonald of Tradeston: With pleasure.
Lord Trefgarne: I am most grateful. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 3 not moved.]
4.15 p.m.
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 4:
Page 1, line 17, at end insert —
("( ) to prevent or minimise noise, vibration, pollution (including light pollution), disturbance or environmental damage of any nature;").
The noble Lord said: With the leave of the House, I shall also speak to Amendments Nos. 61 to 65.
The amendments are about environmental damage. Clause 1 obliges the Secretary of State to exercise his functions under Chapter I in the manner best calculated to promote the purposes set out in subsection (1). Those purposes do not include the protection of those affected by the adverse environmental consequences of air traffic. The amendment would add to those purposes the prevention or minimisation of noise, vibration, pollution, disturbance and environmental damage.
People who live near airports and under the flight path of aircraft can be as affected by the operation of air traffic services as those who fly. Their interests should not be ignored; neither should the damage done to the environment by, for example, pollution, even if
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no specific group of people is affected. That is partly recognised in Clause 39, which gives the Secretary of State powers to give directions on such environmental matters. But, as the Bill stands, he could not exercise that power if it were to conflict in any way with the duties set out in Clause 1. That will limit unnecessarily the Secretary of State's ability to act on environmental matters. The duties set out in Clause 1(1) should include the consideration of such environmental issues to ensure that they can be given proper weight.
The other amendments in the group are to Clause 39, which enables the Secretary of State to give directions relating to the environment. 'The amendments would make such directions subject to approval by Parliament. We welcome the addition of those powers, which are a recognition of the importance of ensuring that damage to the environment is minimised. However, they are very wide ranging and the best way to exercise them may be a matter of dispute or controversy. Parliament as a whole should have an input on issues of such importance.
Clause 39(7) provides that the Secretary of State needs to consult beforehand only if the direction affects a particular licence holder or authorised person and not if it affects them all. The amendments would require consultation when a direction affected all licence holders. It seems slightly bizarre to consult one licence holder or authorised person and the CAA when only one is affected but not to consult all licence holders or authorised persons when all are affected. The direction is likely to be more wide ranging and important and have more far-reaching effects if it affects all licence holders or authorised persons and is therefore more rather than less deserving of prior consultation. The Government should bring forward proposals to consult more widely in those circumstances than just licence holders or authorisecl persons and the CAA. I beg to move.
Baroness Thomas of Walliswood: I see the merit of the amendments. I wish that I had thought to table some of them myself. However, I am a little concerned about the implications of Amendment No. 61. Perhaps the Minister will tell us how his environmental duties are likely to be exercised—by order, by regulation, by guidance or in some other way. That might help us to understand the exact implications of the amendment for how those powers are to be exercised. However, I agree with the general point that the adverse effects of air traffic, such as noise, vibration and pollution, should be part of the Secretary of State's responsibilities.
Lord Macdonald of Tradeston: The amendments are about environmental issues. Amendment No. 4 would add an environmental limb to the Secretary of State's duty under Chapter I, the primary purpose of which is to introduce a system of economic regulation into the provision of air traffic services post-PPP. The duties of the Secretary of State, as set out in Clause 1, deal with concepts such as efficiency, economy and the financing

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of activities. En-route air traffic services will be regulated through an operating licence, which is an economic construct.
The amendment is unnecessary. The environmental provisions already contained in Clause 39 provide for the Secretary of State to give directions in relation to environmental matters not only to the licence holder or holders but to persons authorised by exemption to provide air traffic services. To exercise those powers properly, the Secretary of State has to consider the giving of directions to be necessary or expedient to prevent or deal with issues such as noise. The considerations under Clause 39 are not dissimilar to those proposed by the amendment.
The other five amendments would impose prerequisites on the exercise of the power to give directions. To answer a query from the noble Baroness, Lady Thomas, it is a power to give directions. Amendment No. 61 would require the Secretary of State to get the approval of Parliament before giving directions under Clause 39. That is a significant departure from the present position under Sections 6(2)(f) and 72(2) of the Civil Aviation Act 1982 which this clause largely replaces in respect of air traffic service providers. The amendment would require the affirmative resolution procedure, involving debates in both Houses.
We see no need or justification for that. The power to give environmental directions is long established and used only sparingly. In the past, Parliament has been content to leave these matters for the Secretary of State to deal with, not least because he must have the flexibility to take a wider view on when environmental matters should have priority over financial expediency for the service provider. Examples would be if the provider wished to remove a navigational aid that had residual environmental monitoring benefits; or balancing the economic benefits to the aviation industry and its customers through restraining capacity increases which brings disproportionate economic penalty.
The provisions of the Bill have not altered that position. I suggest that an unnecessary burden would be placed on Parliament if these matters had to be referred to both Houses of Parliament. It would not be open to the Secretary of State to act in an unreasonable manner. If he were to act in such a fashion, he would be rightly open to judicial challenge.
The remaining amendments concern the provision requiring the Secretary of State to consult before giving a direction under this clause. As presently drafted, the Bill provides that the Secretary of State must consult a licence holder or an authorised person only in respect of a specific direction given to that particular individual. The amendments would further require consultation, as the noble Lord, Lord Brabazon, perhaps implied, where a direction is to be issued to licence holders or authorised persons generally.
We regard the amendment as unnecessary. We do not envisage issuing specific directions to licence holders or authorised persons generally, only
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directions of a general character; for instance, that full account be taken of the need to minimise environmental impacts. The appropriate time for consultation will be if and when these general directions are translated into specific details requiring individual providers to do or not to do particular things. At that point there will be consultation with the provider concerned. We believe that there is no need for a requirement to consult on any general directions. In the circumstances, I invite the noble Lord opposite to withdraw the amendment.
Lord Brabazon of Tara: I am grateful to the Minister for that detailed reply. I shall certainly read carefully his words in Hansard, with regard in particular to my first amendment, in Clause 1, to add to the duties. I am grateful for the support I received from the noble Baroness.
I confess that I am obviously not as familiar with the 1982 Act as I should have been. That is my oversight. I had not realised that these measures largely replicate what is in the 1982 Act. If that has worked reasonably well, perhaps there is no need for the amendments to Clause 39. However, I shall read carefully what the Minister said. I was particularly encouraged to hear him say that the Secretary of State would not act in an unreasonable manner. I hope we can be assured that he will always act in that way, not just in this respect. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 5 not moved.]
Baroness Thomas of Walliswood Baroness Thomas of Walliswood moved Amendment No. 6:
Page 1, line 25, at end insert—
("( ) The safety of aircraft must at all times take precedence over other considerations when the Secretary of State exercises his functions under subsections (1)(b), (c) and (d).").
The noble Baroness said: In moving Amendment No. 6 I shall speak also to the other amendments in the group. No doubt the noble Lord, Lord Brett, will speak to his amendment, which is also in this group. I shall start by putting the argument and then go through the amendments, which I think will be easier.
I do not think anyone would doubt that the safety of the air traffic control system after PPP has been a matter of contention ever since the Bill was drafted and put before Parliament. There has been much discussion, for example, about the so-called safety locks; that is, the powers of the Safety Regulation Group of the CAA to inspect, insist upon high criteria for licensing air traffic controllers, approve procedures and equipment, specify working hours and so forth.
The answer that one is given is that much of the inspection is done by NATS, as is much of the approval of procedures and equipment; that the SRG is under-resourced for the work that it is supposed to do; and that in general the standards of hours of work, for example, which are preserved in NATS, are higher than the minimum standards required by the CAA. Another problem is that there is no air traffic control model similar to the one proposed in the Bill, either in

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structure, international relationships or the complexity of the airspace covered in this country. Private providers in the UK are said to vary in their devotion to safety first and may be influenced by the need to generate income or profit.
Air transport is generally regarded as very safe, and so it is if measured in passenger miles travelled. It is less safe, however, than cars or rail per number of passenger journeys undertaken. That is the measure used by Boeing. The argument is that private companies need to generate profit. Safety can be high on the priority list but not always top of the list. Companies that depend on the stock market can be particularly vulnerable in terms of stock value movements and market confidence. During the course of such argument it is often said that airlines always put safety first and they are private organisations; therefore, what is the difference between an airline and NAT'S? The obvious difference, of course, is that airlines are in competition. As one Member said in another place, one can choose one's airline but not one's airspace.
However, even within the airline industry there are indications of the effect of the need to provide low cost and higher profits. The airline industry is reluctant to adopt the safer, rear-facing seat configuration. Long staff working hours are currently excluded from EU working time regulations. Finally, there is a danger of the loss of the safety-first approach because of pressure to reduce costs. An example which is often put forward is that of Railtrack where decisions not to proceed with safety work on the grounds of costs have now been openly admitted and publicly criticised.
One cannot restructure a Bill—especially a complicated Bill such as this—in such a way that every one of these provisos, doubts and worries is satisfied. However, our amendments try to put the safety-first aspect into the Bill wherever possible. Amendments Nos. 6 and 14 insist that safety should be the overriding concern in the exercise of functions by the Secretary of State and the CAA respectively in Clauses 1 and 2.
Amendment No. 35 is an amendment to Clause 8(4). That subsection refers back to subsection (1)(a) which requires the licence holder to ensure the provision, development and maintenance of a safe system by defining "safe". That is what the existing clause does. Our amendment adds to the existing requirement to comply with air navigation orders but the system has to have been licensed by the CAA. That forms part of another series of amendments, to which we shall come later, in which the CAA, rather than the CAA or the Secretary of State, is the licence granter.
Amendment No. 36 omits subsection (1) in Clause 10 which gives immunity from legal action to the licence holder if it fails in its duties under Clause 8 and the licence conditions and substitutes a requirement upon the CAA to take remedial action in respect of any failure under Clause 8.
Amendment No. 48, which adds a subsection to Clause 20, goes a little further. The clause deals with orders to secure compliance with the licence and our
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new subsection requires the Secretary of State to make an immediate order of compliance if the licence holder is in breach of Section 8(1)(a), which is the duty of safety.
Amendment No. 51 inserts the same provision as does Amendment No. 48, but into Clause 22, cutting across the procedures involved in issuing enforcement orders. Amendment No. 54 inserts a new clause which would ensure that, regardless of the provisions of Clauses 20 to 30, which are concerned with enforcement, the CAA or the Secretary of State must suspend the licence if the licence holder is found to be in breach of Section 8(1)(a).
Amendment No. 55 inserts a new clause after Clause 34 which says that the Secretary of State must order the CAA to take over the administration of the UK air navigation system if he becomes aware that the financial state of the licence holder endangers its ability to comply with Section 8(1)(a). Amendments Nos. 56 to 59 amend Clause 35 and make it clear that it is the CAA—that is, the safety regulator—which issues the licence. Amendment No. 60 also amends Clause 35 by placing a backstop duty upon the Secretary of State to ensure the overriding importance of the duty of safety. Finally, Amendment No. 108 amends Schedule 9 to add information about any matter which has an adverse effect on safety to the list of permitted disclosures of information in that schedule. I beg to move.
4.30 p.m.
Lord Brett: It may be appropriate for me to speak to Amendments Nos. 7 and 15, which are grouped with Amendment No. 6, and support the thrust of the contribution of the noble Baroness, Lady Thomas of Walliswood. However, before doing so I should declare an interest. Until one year and three months ago I was the General Secretary of the Institution of Professionals, Managers and Specialists, the union to which the air traffic controllers and engineers of the Civil Aviation Authority, NATS, the SRG and the inspectorate belong.
Amendments Nos. 7 and 15, in the name of myself and my noble friends who put their name to them, seek to underline the primacy of safety. I say immediately that I accept entirely that Ministers both in this House and in the other place share that objective. The objective is not in question. The question is how best to guarantee it.
Over the past couple of days I have taken the opportunity to read again the proceedings of the passage of the Bill in another place and the Second Reading debate in this House on 5th June which, unfortunately, I could not attend. Much of the debate in the other place surrounded public versus private as a means of provision, or indeed the role of the CAA on safety compared with that of NATS. But the real concern of controllers, engineers and pilots has been lost in both of those arguments.
The real concern is one of conflict of interest in the new form of organisation, rather than whether it is publicly or privately owned. First, it is true that the

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CAA set, through SRG, ATC standards for NATS and the rest of the industry. The problem is that, as has been said by the noble Baroness, because of greater traffic densities, because en route control is rather more complicated than approach and airport control, we have had higher standards applied and self-regulated by NATS. The whole culture of NATS has been one of safety without any commercial pressures being applied to bend the whim of specific airlines or airports or indeed senior management in the Civil Aviation Authority itself. An air traffic controller is licensed to control the aircraft. It is those higher, more strict standards of safety about which we are concerned. That is what the controllers, the engineers and, more importantly, the pilots fear could be compromised.
The compromising of those safety standards will come from the private sector controlling interest. We are told in the Bill that the private sector strategic partner will have day-to-day control. The fear is that that day-to-day control and management could lead to the erosion of those higher standards and the Civil Aviation Authority would have no power to intervene until such standards had been eroded to the level that the CAA applies to the rest of the sector—that which handles 13 per cent of commercial air traffic rather than the 87 per cent handled by NATS.
The Secretary of State in another place—my noble friend Lord Whitty echoed this in winding up for the Government at the end of Second Reading in your Lordships' House—said that the NATS higher standards will be maintained through the NATS safety management system (Official Report, Commons, 9/5/00; col. 713). But unfortunately there is no explicit reference on the face of the Bill as to how that might be achieved. Including it in a safety management system, which, in turn, may be considered to be controlled by strategic management agreement, does not mean that in the fullness of time that agreement could not be changed by negotiation between partners coming in (when dilution takes place) and the Ministers sitting in positions of power. That is our fear, and that fear can only be expunged by having the primacy of safety on the face of the Bill.
Our fear is enhanced by the fact that the Government are ensuring that the executive directors in the new PPP will be appointed by the strategic controlling private sector partner. Staff remain fearful that commercial considerations are bound to make some impact because those directors, as part of their remit, will have to meet commercial considerations. That sets up a conflict between operational efficiency and safety. At the end of the day, when something is going wrong, we cannot wait until the resultant tragedy occurs; we must have the power to intervene. If the Secretary of State has safety as a prime responsibility on the face of the Bill, the matter can be raised by Members of this Chamber, another place or directly by those in the industry.
A second important feature is that, while National Air Traffic Services is largely self-regulating—it employees 5,000 people, with 1,700 controllers—and
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ensures the higher standards, the SRG (as mentioned by the noble Baroness) has only a complement of 17 inspectors to inspect the air traffic control system in the United Kingdom. That is because of the self-regulating aspect of NATS. So at the minimum there needs to be considerable expansion in that part of the inspectorate to ensure that the standards are maintained.
As I say, we have no quarrel with ministerial will. We are anxious to ensure that we have, on the face of the Bill, a clause which will guarantee that Ministers in the future will not only understand what the intention of Parliament was in the passing of such legislation as we are now discussing but also have a responsibility to ensure that they maintain, as a primacy, safety over all other considerations.
Lord Clinton-Davis: I support my noble friend Lord Brett. I speak as President of the British Air Line Pilots Association and as a former aviation Minister. Frankly, as aviation Minister, I would not have allowed—if I were overruled I would resign—a situation where safety was not mentioned as a primordial position. Our members—I speak here for the pilots of the association—feel that safety is a paramount consideration. This amendment would write it into the Bill and it is important that it should be written in. There should be no room for doubt about the issue. That is the point made by my noble friend Lord Brett.
Safety should not be a controversial matter. If a civilised discussion were to take place between the Minister and ourselves, I do not believe there would be room for doubt. Unfortunately, it is not that simple. We are judged by what is in the Bill; and what is in the Bill is inadequate. Therefore, we are trying to insert some wording into the legislation. It is possible that what we have suggested is not correct and the Minister may wish to change that wording in some way. But we could have a civilised debate about safety.
I do not believe that there is anything more important to the travelling public, to our members the pilots—or for that matter to those who are involved in NATS than safety. Until the issue of safety became paramount at the Paddington inquiry, the outcome of which I do not wish to anticipate, it had not been mentioned. Why not? Safety is just as important in the air as it is on the railways.
I speak as a former holder of the office that the Minister now occupies. I do not believe that anything we have suggested in this amendment would in any way affect or prejudice the Government. Why should we be the only country that does not recognise safety in the way explained by the noble Lord? Why should we be making an exception internationally to our duties, which the Minister surely recognises as such?
I believe that it was the Minister's job to consult widely with the airline pilots on this issue, as was the case with NATS. I have no doubt that the Minister will say that he did talk to them; indeed, he did. But there was no meeting of minds. If there had been, the noble Lord who tabled this amendment would not have felt

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obliged to do so on behalf of those whom he once represented. Similarly, I would not feel obliged to do so on behalf of the pilots.
I suggest that we may perhaps have missed the point. In that case, the Minister will put us right in that respect. However, if we have not missed the point—I submit that we have not—then I and the other three noble Lords who have attached their names to this amendment will be happy to discuss the matter further with the Minister. It is possible that we have not explored all the possibilities. But if that is right, I believe it is incumbent upon the Minister to ensure that he tells us in emphatic terms that we are right to put safety first and that he has an alternative that he can put forward tonight. There is still room for compromise: compromise is important as far as we are concerned.
Finally, as Minister responsible for aviation I would not at any time have enabled discussion to be closed down on the issue of safety. I made it an important matter when I held office, and I believe that I was right to do so. It is also right for the noble Lord who currently holds this important office to do so.
4.45 p.m.
Lord Lea of Crondall: I, too, support this series of amendments. However, I acknowledge that there is a certain awkwardness in debating safety because some people do not perhaps give it as much priority as others. That is a very unsatisfactory way of approaching the matter. Nevertheless, there are some important areas where clarification is needed before such safety concerns are satisfied.
We are told that basically there is no change in the role of the CAA as safety regulator, but it seems to be a matter of "all change" as regards many other aspects of air traffic control. As my noble friend Lord Brett said, there should be no scintilla of suspicion or perception that there is any conflict of interest between the commercial interests of the PPP licensee and the CAA as the safety regulator. Here one may speculate about who the PPP licensee might be. We have received letters from the Airline Consortium, and that is food for thought. It is a consortium of British airlines. What would their interest be and their perception of it?
My main question for my noble friend the Minister is as follows. How is safety to be factored into the financial bench-marks? During the past few days we have seen a remarkable exchange of documents in the public arena between the CAA and the NATS about the next few years. As regards the CAA's twin responsibilities of safety regulator and economic regulator, it is interesting to note that "never the twain shall meet". There is a document that has posed some financial targets upon which NATS was asked to comment, such as, cost reductions of up to 36 per cent following the sell off. One may wonder about the standing of the CAA at the moment when it is consulting on a five-year plan, as it were. However, perhaps my noble friend the Minister will comment on the position.
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I do not wish to paraphrase the NATS reply, but the CAA document does not seem to be couched in terms that show a full understanding of the cost factors in the safety culture of NATS. There seems to be a lack of joined-up thinking in the CAA, so to speak. That prompts me to ask: is it all change or no change at all in the CAA in this regard? When this Bill becomes an Act it will certainly change the commercial context in which NATS operates; indeed, that will be the subject of some of our later discussions dealing with the role of the Crown directors, and so on. In the main, we should like clarification on whether there will be some reconciliation of the role of the safety regulator and commercial freedom and the new, tougher arm's-length relationship with the CAA as the economic regulator.
Lord Hoyle: I rise to express my support for my noble friends who have spoken in favour of Amendments Nos. 7 and 15. We say that safety is all important; indeed, it is paramount. The reason we want safety to be paramount is that once you bring in the private shareholders of a PPP there must be a return. There is a difference in the privatisation that is taking place in relation to NATS as against the privatisation of, say, the airlines or of the British Airports Authority. That difference is the fact that the only service being offered is one of safety. That is why we are concerned that the issue of safety is not on the face of the Bill. I hope that my noble friend the Minister will agree to consider the amendments that have been tabled in this respect to ascertain whether he can include the issue of safety in the legislation.
I turn to the point raised by my noble friend Lord Lea, who mentioned not just the press reports but the response of NATS to the second consultation paper. I hope that my noble friend the Minister will address those points. NATS sought savings of up to 17.5 per cent. However, the Economic Regulation Group seeks far greater savings of 21 to 35 per cent over a five-year period.
We have been told that under a PPP there will be greater investment. However, the ERG seeks investment that is 16 to 29 per cent lower than that of NATS. Where will the savings come from? Will they be achieved at the expense of safety? Everyone knows that in this computer age efficiencies can be achieved. However, air traffic is increasing. Will the savings be achieved by cutting the number of controllers? That question is central to the whole matter and to the doubts that some of us feel about the partial privatisation.
As my noble friend Lord Brett has said, we appreciate that safety is a priority, but are we talking now about minimum or maximum safety standards? The present high safety standards result from the actions of controllers, pilots and engineers in reporting incidents that have occurred. Will the staff of a partially privatised company feel as free to report those incidents, or will there be a tendency to cover them up as the company's reputation may be at stake? What guarantee is there that maximum safety standards will be maintained?

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NATS and ERG already have different opinions as regards what can be achieved in this regard. Will there be a conflict in this regard between the new company and the regulator or between it and the airlines? Where do the Government stand in relation to safety? I hope that my noble friend the Minister will give us some assurances on this matter. What we do not want to see is a situation developing similar to that at Railtrack. I hope that my noble friend will accept that not only should safety be paramount but that it should be included on the face of the Bill.
Lord Brabazon of Tara: I am grateful to the noble Baroness for explaining her amendment and to the noble Lord, Lord Brett, and his noble friends for explaining theirs. Safety is absolutely the most important thing that National Air Traffic Services provides. I agree with those who have said that up to now—I hope that this will be the case in the future—NATS has had an outstanding culture of safety in its operations. Nothing must be done which could adversely affect that. Its business is to provide safety.
Up to now I have not been concerned that the part privatisation of NATS would have an adverse effect on safety because, as I say, the business of NATS is to provide safety and it has a safety culture. At Second Reading I said that I welcomed the aspect of the Bill which separates NATS from the CAA. At present the CAA is the owner and the regulator of NATS. It must be desirable to separate the regulator and the owner.
I hear what has been said about the Safety Regulation Group in the CAA. However, like the noble Lords, Lord Lea of Crondall and Lord Hoyle, I was extremely concerned and surprised to note the comments of the Economic Regulation Group to National Air Traffic Services. I shall return to that matter on a later amendment. I thought that the whole point of the measure we are discussing is to have increased investment in NATS and not a proposed reduction in investment.
I also thought that, as aviation continues to grow by 6 or 7 per cent a year, we would need more controllers rather than fewer. Therefore, I was surprised at the document of the Economic Regulation Group. As I say, I shall return to that issue which gives me cause for concern.
I hope that the Minister can expand on a detail of the Bill. Clause 1(2) states:
"These interests are the only ones to be considered under subsection (1)(a) —
(a) interests regarding safety".
I hope that the Minister will explain where that measure fits into the debate. The same wording is repeated in Clause 2(2) with regard to the Civil Aviation Authority.
I shall listen with great interest to what the Minister has to say in response to the points made by so many of his noble friends.
5 p.m.
Lord Macdonald of Tradeston: The amendments in this group are all related in some way to safety, a subject to which we have given a great deal of thought in drafting Part I of the Bill. In so doing we have listened to a wide range of views from interested parties—I have been involved in discussion with the relevant trade unions for over six months now—not least the views of noble Lords, as expressed at Second Reading and today.
I say straightaway that we are convinced that our proposals for a PPP will preserve and enhance safety. We have looked closely at these amendments. I believe that most of them are not necessary, for reasons which I shall explain. However, there are a number of amendments where I believe that at least the underlying principles are worthy of further thought. As I shall indicate in more detail in a moment, I shall be happy to take these amendments away and consider them.
I trust that it is clear that the intention underlying the proposed Amendment No. 35 is an admirable one. We all take safety extremely seriously. I make no apology for repeating that safety must be the first and foremost consideration. NATS has rightly made the point that its sole business is safety. There can be no question of allowing that to be compromised.
This amendment is not, however, necessary. Clause 8 already requires holders of licences to secure that they provide, develop and maintain a safe system for the provision of authorised air traffic services in their licensed areas. That duty is not qualified and there are no "ifs" or "buts". A safe system is defined, for purposes of clarity, as one which complies with the pre-existing safety regime; namely, the requirements of the Air Navigation Order. Those requirements include obtaining a range of safety approvals from the CAA covering the service provider's systems, practices and personnel. A safe system is, therefore, a licensed one.
Amendments Nos. 36, 48, 51, 54 and 55 all deal with what should happen in the event that a licence holder fails to comply with its statutory duty to provide a safe service. The Bill contains a comprehensive enforcement regime in respect of that statutory duty which the CAA can apply through a series of provisional and final orders. If necessary—that is, if the breach is serious enough to make it inappropriate for the company to continue to hold its licence—application may be made to the court for an air traffic administration order. Such an order will remove the licence holder's activities from the hands of those who have allowed the breach to occur.
These are important procedures and perhaps it would be helpful if at this point I explained their application in some detail.
If a licence condition or Clause 8 duty is contravened or is likely to be contravened, Clause 20 makes clear that the CAA must issue an enforcement order designed to secure compliance by the licence holder. If the CAA is not satisfied that a contravention has taken place, but it still appears to it that a licence holder is contravening, or likely to contravene a

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Clause 8 duty, the CAA must, if it thinks a provisional order is needed to prevent loss or damage to a third party, issue a provisional order containing the provision it believes is needed to secure compliance with the Clause 8 duty or licence condition. The only exceptions to this obligation on the CAA to take enforcement action are where its statutory duty precludes it from doing so; where it is more appropriate to use its powers under competition legislation; where the licence holder is already taking appropriate steps to remedy the situation; or where the contravention is trivial or will not affect anyone. None of these exceptions is likely to apply where there is a serious safety breach.
All breaches or possible breaches of licence conditions or Clause 8 duties are subject to enforcement, regardless of whether or not they are a result of the financial state of the licence company. I hope that the noble Baroness, Lady Thomas, will agree that this process of enforcement provides an appropriate mechanism by which to enforce less serious breaches, which should be promptly and effectively corrected by the licence company. These procedures also avoid the need to use a sledgehammer to crack a nut for what may only be a technical breach. However, it is clearly important that any breach requiring an enforcement order must be complied with promptly and effectively. The consequences, therefore, of a failure to comply with an enforcement order would be extremely serious for a licence company, as is made clear by Clause 28.
If the licence company fails to comply with an enforcement order, the Secretary of State and the CAA may petition for an air traffic administration order to be made under Clause 28 to transfer control of the licence company to an administrator nominated by the Secretary of State and the CAA. To the licence holder that would effectively mean loss of control of the company and its assets without any guarantee of reimbursement of its investment.
I have just explained the enforcement order process. However, I can understand that Members of the Committee will say that the enforcement process takes time, allows for representation and appeal by the licence holder, and therefore may not be suitable where the contravention or breach is of such significance that it is clearly inappropriate for the licence holder to continue to hold that licence. In such cases it is clear there would be a need for the CAA and the Secretary of State to be able to move swiftly to take control away from the licence company.
Such a fast-track provision for serious breaches is, as I have already mentioned, provided in the air traffic administration provisions, and particularly in Clause 28, which allows the Secretary of State and the CAA to petition for an air traffic administration order where it is clearly inappropriate for the company to continue to hold a licence because there has been, or is likely to be, a serious contravention by the licence company of a Clause 8 duty—it should be noted that there is not even a requirement for a breach to have occurred, just that it is likely—or the company is insolvent; or the
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licence company is in breach of an enforcement order. In most cases, the provisions of the licence would allow for revocation of the licence at the same time.
The consequences of an air traffic administration order being made are, as I have previously mentioned, to transfer control and management of the air traffic control assets and business to an air traffic administrator nominated by the CAA and the Secretary of State. In this way the Secretary of State and the CAA will be able to ensure that safe services may be maintained at all times.
I apologise for that somewhat lengthy explanation of the control and enforcement mechanisms relating to safety and the licence. Some Members of the Committees may already be familiar with them, but I felt that it was important to go through them in some detail again in order to explain why we consider these amendments would not add to the safety regime.
Lord Shore of Stepney: I am grateful to the noble Lord for giving way and for that explanation. However, can he address the question that, if the partnership company to be set up falls into non-governmental majority hands, the order which the noble Lord has described would be operative and override their rights as shareholders?
Lord Macdonald of Tradesman: As we go through today's business we shall make clear that the question of a company falling into other hands, as the noble Lord, Lord Shore, puts it, is one of the issues that we shall try very hard to avoid and, we hope, successfully. We shall be going into more detail about that later on.
Turning now to Amendment No. 56, Clause 35 lays a duty on the CAA to compile and maintain a register which is to be available for public scrutiny of matters relating to licences and exemptions. It includes provision for the CAA to exclude matters relating to a person which might seriously and prejudicially affect that person's interests. It makes provision for the Secretary of State to direct the CAA to exclude anything which would be against the public interest or any person's commercial interest.
This is not a new provision, it is a feature of other utility licensing regimes—for example, Sections 72 and 73 of the Railways Act 1993. It is the Secretary of State's practice to start from the strongest possible presumption that he should not direct material to be excised unless it is clear either that a person would suffer real commercial prejudice from its inclusion, or that its inclusion would be contrary to the wider public interest. It is possible, for example, that an operating agreement between NATS and the MoD, made pursuant to the licence, might contain sensitive material, the disclosure of which might be undesirable for security reasons. The safeguards seem to us to be reasonable and appropriate. I can assure the Committee that the Secretary of State will not be prodigal in his use of the powers of Clause 35(6).
On a similar line, Amendment No. 108 seeks to remove the restriction on disclosure of information, except between regulators, related to safety in

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Schedule 9. I find it a little difficult to see why that should be necessary as the CAA will have access to all safety related information and, as safety regulator, will be in a position to take any action necessary.
I now turn to Amendments Nos. 57, 58, 59 and 60. Clause 38 provides a power for the Secretary of State to give directions of a general character to a licence holder or licence holders generally, when it is necessary to do so in the interests of national security or in the interests of encouraging or maintaining the UK's relations with other countries. It also gives the Secretary of State the ability to direct a licence holder requiring it to do, or not do, a particular thing in the interests of national security and to secure that a particular thing is done in connection with the licensed activities, if that is necessary, in order to discharge an international obligation.
Amendments Nos. 57, 58 and 59 all seek to constrain this clause to one licence holder; that is, not to allow the Secretary of State to give directions of a general character to licence holders generally. It is true to say that we envisage only one licence holder for the foreseeable future. It would not be appropriate for Part I to drafted on such rigid a basis since there may be more than one licence holder at some point in the future. Were there to be more than one licence holder, this amendment would mean that any directions of a general character would have to be given separately to each and every licence holder. That does seem to be imposing an unnecessarily laborious requirement in the case of directions of a general character.
I said that I was going to express enthusiasm for some of these amendments. Amendment No. 60 seeks to ensure that when the Secretary of State gives a direction under this clause he must assess the impact of the direction on the licence holder and require that steps be taken to ensure that the duty of the licence holder under Clause 8(1) to secure a safe system for the provision of authorised air traffic services is not in any way compromised. Effectively, the amendment is putting safety as the prime consideration. Again, we do not disagree with the sentiments behind this amendment. In all our discussions about the PPP proposals we have made it clear time and again that safety is, and must be, the first and foremost consideration.
The amendment is not strictly necessary. Clause 38(6) already specifically requires the Secretary of State to consult the particular licenceholder before giving a direction. It is at this stage that the licenceholder will be able to advise the Secretary of State of any difficulties in relation to safety arising from that particular direction which the latter has not already considered. If there are safety implications in any direction, the Secretary of State will not wish to compromise safety in any way.
Nevertheless, I recognise that there is a case for spelling out quite explicitly that safety remains a relevant consideration, even where directions are being considered on grounds of national security. I recognise the legitimate wish of those involved in aviation to be given the comfort of such a statement on
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the face of the legislation. I am therefore prepared to undertake to consider before Report stage what amendments might be appropriate to meet these concerns.
In the same spirit, I turn also to Amendments Nos. 6 and 14 and to Amendments Nos. 7 and 15. I want to make it clear that I recognise the underlying concerns about safety raised by both sides of the Committee. I hope that noble Lords will find what I have said reassuring and that they can appreciate the Government's commitment to the protection and enhancement of safety standards. As has been said by noble Lords opposite, safety is the very essence of air traffic control. Neither the Secretary of State, the regulator nor the licensee can ever afford to forget that.
The issue of safety is emphasised in Clauses 1(2) and 2(2), where the Secretary of State and the CAA are required to consider the safety of users in exercising their functions under Chapter I of Part I of the Bill. It is also emphasised in Clause 8, which requires the licenceholder to provide, develop and maintain a safe system for the provision of air traffic services in his licensed area.
However, I must point out that legislation which required the promotion of safety above all else would place an unsurpassable obstacle before the efficient and economic operation of the aviation industry. Obviously, taken to its extreme, the safest way would be to prevent aircraft flying at all. The public want an air traffic system which balances safety appropriately with other interests; a system which gives safety a very heavy weighting but still ensures that traffic is able to move around our skies. That is why there is a specific safety regime.
Lord Clinton-Davis: Before the noble Lord leaves that point, with great respect, what the ordinary passenger requires is that safety should be given an important priority over other considerations. If that is not done, the ordinary passenger will seemingly be prejudiced. Surely the noble Lord sees that point.
While I am on my feet, one of the points made by the air traffic controllers who came into possession of the document referred to in the Daily Telegraph on Tuesday concerned manning levels. Does the noble Lord acknowledge that manning levels are absolutely critical to safety and service delivery?
5.15 p.m.
Lord Macdonald of Tradeston: I am very happy to assure the Committee and the noble Lord, Lord Clinton-Davis, that safety is paramount. I shall go on to cover the question of the report that he mentioned, which was referred to in the Daily Telegraph and other newspapers.
We have a specific safety regime which will be unchanged by this Bill. The Bill is creating a regime for the economic regulation of providers of certain air traffic services which currently enjoy a monopoly position in the market-place. Safety regulation is dealt with at length in the Civil Aviation Act 1982, the air

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navigation order which is subordinate to it, and by the safety regulatory regime. That, along with a commitment to safety which is very firmly fixed throughout the aviation industry, has resulted in the UK having one of the best air traffic safety records in the world. We intend to maintain that record under this legislation.
As I have said, the Bill lays a duty on both the Secretary of State and the regulator to have regard to safety and on the licenceholder to provide a safe system. Taken together with the existing safety regulatory regime, we believe that the noble Baroness's concerns are already well addressed. I do not believe that with the Bill as it stands there is any actual risk that safety will be compromised in any way. As we have said repeatedly, regulation will be separated from operation. I am grateful for the support of the noble Lord, Lord Brabazon, for that intention.
All existing safety arrangements will continue; existing legislation concerning safety will be unchanged; and it will of course apply to the NATS PPP. There will also be safeguards in the partnership agreement to secure NATS existing standards of safety. The reason why the Bill needs to say relatively little about safety is that those powers are already in place and remain unchanged.
Perhaps I may address the question which has been raised by a number of noble Lords about the exchange between the Economic Regulation Group of the CAA and NATS. The Committee should be aware that the articles were, to my mind, somewhat misleading. The true position is this: that under the PPP, NATS charges will be regulated using the RPI minus X formula, with which the Committee will be familiar from earlier utilities legislation. The Economic Regulation Group of the CAA has the task of advising the Secretary of State about the initial value of X. The CAA document referred to in the newspaper articles is part only of a process of consultation designed to help it to prepare that advice.
It does indeed suggest that there might be scope to set quite a high value for X—in other words, to reduce the costs of the service—but that is not the end of the story. It has not been made clear that the kind of value for X discussed in the paper depends on a number of factors concerning NATS future operations. The ongoing consultation is as much about drawing out views on these factors as about what X itself should be. The response from NATS and from others will guide the Economic Regulation Group in preparing its final advice, which we expect to receive in the next few weeks.
I believe that we are seeing an exploratory process—as we have seen before—between regulators and utilities. The noble Lord, Lord Hoyle, asks why then the emphasis on perhaps cutting back on capital expenditure. I should explain that the challenging exploratory process would be a regulator perhaps saying, "You have not had as much success as you might have had in the past in your plans for investment; therefore how can we trust that you will be able to spend all the money that you claim you would
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like to spend in future?"; and perhaps also in the sub-text suggesting that, were it under a different kind of ownership, it might behave in a more managerially effective and efficient way than in the past. These are the kind of exchanges that go on between regulators and utilities, and I suggest that that is what we are hearing at the moment.
Lord Brett: I thank my noble friend for giving way. Could I make the point that was made by NATS in its response to ERG—that is, that NATS is not like any other utility? Therefore, the fact that ERG is using formulae that produce very considerable economies in both operational and capital costs and, at the same time, the Government are giving this Commit tee and another place well-meaning assurances that safety Is absolutely paramount and that there is no risk whatever, creates a problem given that the advice is public from an ERG which is part of the same Civil Aviation Authority that will regulate safety. At the end of the day, when the Minister makes his decision, can he assure the Committee that there will be no "RPI minus" formula which will put safety at risk?
Lord Bradshaw: Perhaps I may add to that point. I accept the Minister's assurances, but does the legislation ensure that when it is time to reset the formula a future Secretary of State will still be in a position to intervene if the view is that setting RPI minus X at a large figure may actually so prejudice the operation or the capital investment in air traffic control that safety may be prejudiced? In a number of other regulated utilities we have seen the screws now being turned very tightly in the interests of economy. One is concerned about quality in several other utilities.
Lord Macdonald of Tradeston: I can give the Committee a complete assurance that the value which the Secretary of State will set on the factor X will be such as to enable NATS to preserve existing safety standards in full. We shall not contemplate anything else. The final decision is not for the Economic Regulation Group; it is for the Secretary of State.
Lord Hoyle: I thank my noble friend for giving way. He made the point that, as NATS is still in the public: sector, perhaps it might not take the management decisions that might be taken in the private sector. That alarms me greatly. In the public sector, safety is paramount and all decisions are taken in relation to safety. Will my noble friend comment on NATS' response to the ERG? In paragraph 1.4 of the response, NATS states:
"NATS recognises that ERG has not had sufficient time to evaluate NATS' own plans in detail".
But it goes on to say:
"The cuts in cost and investment currently being proposed by ERG have little foundation in the reality of NATS' business and licence obligations, and so pose very serious risks to the delivery of services to NATS' customers. NATS could neither accept nor implement these proposals".

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I hope that my noble friend is not suggesting that once NATS becomes a PPP, the cuts will then be implemented.
Lord Macdonald of Tradeston: Not for a moment. I hope that I have been assuring Members of the Committee that the final decision on the value of the X factor and the cost equation will be taken by Ministers. I can assure Members of the Committee yet again that we shall do nothing to compromise or undermine NATS' ability to provide safe air traffic control services for all users. Existing standards will be entrenched in legislation and regulation.
What one is seeing here are exchanges inside a consultative process which is an exploratory one. We believe that Clause 8(4) in no way allows degradation of NATS' internal safety standards. NATS is currently only required to meet safety standards established by the Air Navigation Order. Internal safety standards are a matter for its management and, after the PPP, for its owners as well. One of the owners will be the Government. Although NATS' current standards are above mandatory levels, any change from those standards—I say this in reply to a number of Members of the Committee—would require approval from the CAA as the safety regulator.
I am conscious of the time that I have already taken up. Therefore, I shall not go into the eight safety locks with which I know some Members of the Committee are familiar; neither shall I go into the enhancements which the Government have proposed to include to try to give extra assurance to those concerned that safety remains paramount. Having said that, the strength of view on these matters is clear.
As I indicated earlier, there is a case for additional reassurance on the face of the Bill about a leading role for safety to reflect the genuine concerns of people in the industry, air travellers and Members of the Committee present today. Therefore, I am happy to offer to consider that question with a view to seeing whether suitable amendments can be made at a later stage. I should also be happy to have a meeting with the noble Baroness and indeed with other noble Lords to discuss these matters if that would be helpful. With that commitment, I respectfully ask the noble Baroness to withdraw the amendment.
Baroness Thomas of Walliswood: We have been fortunate to hear some splendid speeches from Members of the Committee opposite who have enormous experience in this field. I feel rather a tiro by comparison. The effect of our efforts has been to stimulate an interesting response from the Minister. Perhaps I may be "picky" for just a moment. We have tabled Amendment No. 108—the amendment to Schedule 9—which the noble Lord dismissed rather airily, because we consider that information regarding dangerous incidents, or whatever it may be—I refer to matters which affect safety—should be public. The public have a right to know what is going on in the field of safety. That was our motivation for tabling the amendment. However, with the final words of the
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Minister still ringing in my ears, with his offer to consider how the concerns expressed from all around the Committee can be satisfied, and with his very kind offer to meet those who have spoken today and no doubt other people who are interested in this matter, and bearing in mind that it was a very long answer which was not immediately understandable to my non-legal ear, I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
Lord Brett Lord Brett had given notice of his intention to move Amendment No. 7:
Page 1. line 25, at end insert—
("( ) The effects on the safety of aircraft by the application of subsections (1)(b), (c) and (d) must at all times take precedence over all other considerations.").
The noble Lord said: I appreciate the length of the Minister's response and the commitment given by him. I, too, should like to read Hansard with some care. It was a long and somewhat interrupted response, but I am grateful to him for his offer of a further meeting.
[Amendment No. 7 not moved.]
The Deputy Chairman of Committees (Lord Strabolgi): I have to point out that if Amendment No. 8 is agreed to, I cannot call Amendment No. 9.
[Amendments Nos. 8 to 11 not moved.]
Clause 1 agreed to.
Clause 2 [CAA's general duty]:
[Amendments Nos. 12 to 16 not moved.]
Clause 2 agreed to.
Clause 3 [Restrictions on providing services]:
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 17:
Page 2, line 41, after ("provides") insert ("en route").
The noble Lord said: In moving Amendment No. 17, I should like to speak also to Amendment No. 18 and to the Question whether Clause 4 shall stand part of the Bill. I shall be extremely brief on this group of amendments. Clause 3 brings all air traffic services together, whether or not en route within the licensing system, Clause 4 allows the Secretary of State to grant exemptions. This set of amendments takes air traffic services that are not en route air traffic services outside the licensing system. The Explanatory Notes to the Bill indicate that the Government propose to grant exemptions to providers of services that are not en route air traffic services. If that is the case, and exemptions are given, it is difficult to see why they have been brought within the system in the first place. Who is to be subject to regulation is a fundamental issue and should be dealt with in appropriate detail in primary legislation. It is not a matter that should be left entirely to the discretion of the Secretary of State. I beg to move.
5.30 p.m.
Lord Macdonald of Tradeston: The Government yield to no one in their desire to keep bureaucracy to a minimum. I can assure noble Lords that it is our intention to license only those air traffic services which are provided on a monopoly basis. Where such

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services are provided by contestable commercial con tract—as they are, for example, at airports—there should be no need for licensing. For that reason, we intend that only en route services should be licensed, but it is not, unfortunately, a simple matter of inserting the words "en route" into the provisions of the Bill, as might be suggested by Amendments Nos. 17 and 18. Perhaps I may explain why.
There are two reasons why the Bill does not confine itself to the provision of en route air traffic services. The first of them is driven by considerations of safety and operational necessity. Everyone in the aviation sector knows what "en route" means: it is the portion of a flight which lies between the end of the take off and initial climb phase to the beginning of the approach and landing phase. However, that is only a partial description rather than a definition. It does not tell us where the take off and initial climb end or where the approach begins, nor can it in any meaningful way because the point at which "initial climb" ends and "en route" begins, and the point at which "en route" ends and "approach" begins are not fixed. They vary from airport to airport and, at any one airport, they can vary on a daily or even on an aircraft to aircraft basis, depending on factors such as traffic mix and weather conditions.
For good reasons of safety, this flexibility is absolutely essential operationally, but it does lead us to the approach which is adopted in the Bill; namely, a wide power to issue licences with scope for an exemption to cover services which do not need the economic rigour of a licensing regime.
Amendment No. 18 would mean that only the provision of en route air traffic services could be licensed and, ill understand correctly the intentions of the noble Lord, Lord Brabazon of Tara, that no provision for exemption would be needed. That brings me to the second reason why we have settled for a wide definition of air traffic services in Clause 97, along with he power to make exemptions.
We appreciate the concern which may exist over the extent of licensing and, as I have said, it is our intention to license only those services which are provided on a monopoly basis. However, we must recognise that the nature of the air traffic services market may change. Over time, it is possible that the boundary we propose—the current one—could be rolled back somewhat if a further element of air traffic service provision became contestable. Equally, if a component emerged which called for economic regulation, then again the scope and nature of licensing and exemption could need to change in the long term.
Members of the Committee do not need to be reminded that air traffic services provision is a dynamic activity. The Government believe that the regulatory framework which this Bill seeks to establish must recognise that dynamism and be capable of responding to it. As the Bill is drafted it provides the
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necessary flexibility and I ask noble Lords to preserve it. I hope that the noble Lord will not pursue his amendment.
Lord Brabazon of Tara: I do not intend to pursue this amendment. I am very interested in what the noble Lord said in his response. I appreciate that "en route" does not necessarily have a fixed beginning and end, and I accept too the explanation why the noble Lord wishes to retain the wording as set out in the Bill. However, that slightly begs the question of how an exemption could be given within the licensing system, if that is the case. As I have said, I do not wish to pursue the amendment and I beg leave to withdraw it.
Amendment, by leave, withdrawn.
Clause 3 agreed to.
Clause 4 agreed to.
Clause 5 [Licences: general]:
[Amendment No. 18 not moved.]
Baroness Thomas of Walliswood Baroness Thomas of Walliswood moved Amendment No. 19:
Page 4, line 8, leave out from beginning to second ("the") in line 11 and insert ("a not for profit company, formed and registered as a company limited by guarantee under the Companies Act 1985 or").
The noble Baroness said: I beg to move Amendment No. 19 and speak at the same time to the other amendments that we have tabled in this grouping. It may be convenient to the Committee if I refer also to our reasons for opposing that Clauses 49 to 51, 55 and 56 should stand part of the Bill because these proposals all fit together.
Amendment No. 19 removes some categories of permitted licence holder from Clause 5 and substitutes,
"a not for profit company"
covered by company law in Great Britain and Northern Ireland. Here we have reached what, so far as concerns these Benches, is the meat of Part I of the Bill; namely, the kind of company into which NATS should be transferred.
Amendment No. 66 amends Clause 41, covering the meaning of a transfer scheme, to ensure that a transfer from the CAA, or a wholly owned subsidiary of the CAA, may be to a not for profit company. Amendment No. 68 introduces a new clause covering provisions for a transfer to be to a not for profit company and defines what is meant by the term, 'not for profit company". It provides that such a company shall not issue shares or pay profits or dividends to its members, and that those members shall represent the providers, employees and users of air traffic services. Amendment No. 69 adds a further new clause covering parliamentary approval of a transfer scheme. It states that such a transfer shall require the resolution of both Houses, following the laying before Parliament of a report which, first, should set out the progress being made on Swanwick, Prestwick and other pre-transfer projects and, secondly, should confirm Treasury approval of the transfer.
Amendments Nos. 70 to 78 are textual amendments to link the trust proposal into Clauses 44 to 48 which deal with the detail of transfer schemes. Amendment No. 86 in Clause 52, Amendments Nos. 87 and 88 in Clause 53 and Amendment No. 90 in Clause 54 all substitute new for existing wording. The effect will be to enable the Secretary of State to make loans to, guarantee the discharge of financial obligations of and make grants to a not for profit company to whom a transfer has been made. Our intentions to oppose the Questions that Clauses 49, 50, 51, 55 and 56 stand part are therefore consequential on our proposed trustee option.
Equally, Amendments Nos. 93 and 94 are consequential on the loss of Clauses 49 and 50. Amendments Nos. 97 and 98 insert new wording into Clause 65 covering interpretation. That, too, would be a consequence of a change to the trust option.
On Second Reading, I said that we accept, albeit with reluctance, the Government's decision to offload NATS into the private sector so as to avoid the public sector borrowing requirement consequences of the required capital investment. Perhaps I should point out, in view of what was said during our discussions on the previous amendment, that no one on these Benches is in any way opposed to the separation of NATS from the CAA. I hope that that proposal can now be laid to rest. I believe that it is now universally accepted that it will be a "good thing".
However, along with many of my colleagues, I should have instinctively preferred to see NATS remain in the public sector. Although it is difficult to press such an argument in the modern world, it is the kind of operation which, conceivably, sits better in the public sector—perhaps one should not be too mealy-mouthed about making that kind of comment. On the other hand, it is not possible to change the mind of a Chancellor of the Exchequer—I believe that he is the driving force behind this proposal—by amending a Bill from the Department of the Environment, Transport and the Regions. Trying to put down amendments in opposition would be nonsensical.
Having said that, and given the support expressed for the trust option by both the select committee and Members in another place, we have decided to propose amendments to support that option in this House. Perhaps I may say that this decision has appeared to be even more justified as we have learnt more about the potential of the trust option since our debates on Second Reading.
An argument can be put forward that the trust option is important because of considerations of safety. I think that we covered that matter thoroughly when considering the first group of amendments. However, I should like to put forward additional arguments which derive from the special characteristics of the trust model. A trust would not have shareholders and would therefore not have to return a profit for their benefit. That could conceivably make a "safety first" culture easier to create and maintain. Interestingly, one of the possible
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bidders for the PPP, Air 2000, envisages keeping what is now NATS core business as a not-for-profit part of a future PPP business. There is support for this approach.
Unfortunately, private businesses and/or shares in them can be bought. Who can say who might successfully take over the privatised NATS? The noble Lord, Lord Brabazon, has tabled amendments seeking to ensure that NATS remains a British company. I do not believe that that is a feasible option either. I shall not comment on the noble Lord's proposal now; I simply make the point. The Government's share in a privatised NATS could fall as low as 25 per cent, and who can say who would be the purchaser of the other 75 per cent? Secondly, the board of the trust will be constructed in such a way as to keep the public interest in balance with other interests, rather than in a permanent voting minority as envisaged in the PPP solution.
Those two characteristics—the not-for-profit aspect and the character of the board—could help the trust to face up to what lies ahead in terms of changes in air traffic technology and the international relationships within which the changes are taking place and will continue to do so. I refer to the way in which air traffic control will increasingly have to change in order to provide more air space and fewer delays as growth in air traffic clogs up the existing flight corridors. These changes are referred to as "free-flight" and "free-routing". It is conceivable that a trust would be more effective in dealing with those difficulties. It might command the required capital at a lower rate. It might be more acceptable to its partners. Free-flight and free-routing, and indeed air traffic control in general, require a co-operative international approach, and all the other international partners are currently government-owned or government-controlled operators; none is yet in the private sector.
In short, the trust model proposed in the amendments would enable the Government to get what they want—that is to say, to pass the cost of financing investment to the private sector—while retaining many of the benefits of NATS remaining in the public sector. I beg to move.
5.45 p.m.
Lord Brett: I rise to express considerable sympathy with the proposals in this group of amendments. I apologised earlier for not being present at Second Reading. I did, however, set out my views on the proposals for privatisation or part-privatisation of NATS in my maiden speech last October, so my views at that stage were known to the Minister. I believe that the vast majority of the staff employed within NATS also have great sympathy with the proposal for a trust.
My noble friend Lord Whitty did a disservice to the trade unions in his reply at Second Reading. He said:
"The Liberal Democrats want to put it in a trust. The trade unions by and large want to keep it in state ownership. The Conservatives want it totally privatised".—[Official Report, 5/6/00; col. 1026.]

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My noble friend may be doing justice to the position of Liberal Democrats and the Conservatives, but the trade unions had said to the Government as early as February that there were two alternatives acceptable to them: one was the IPOC (Independently Publicly Owned Company) and the second was a trust. The trade unions provided a model—not one to be applied absolutely but one to be examined; namely, the system employed in Canada, where there has been a successful move to a trust. It has been the subject of correspondence and also of debate in another place. It remains a proposal with greater resonance than the Government's proposals with the staff of NATS.
The rationale behind the Government's decisions has moved swiftly, starting from a position of needing to plug a gap in expenditure plans of £500 million, inherited from the previous administration and applied by the present Government. The reasoning moved on to the need to raise the £100 million a year required for investment over the next 10 years, and to do so outside the PSBR. It then mutated into a desire to have a strategic partner to ensure that the UK would be a major player in Europe and the world as countries moved away from state provision of ATC, to fewer ATC centres and with much greater private sector involvement. In the latter stages the idea was of a UK NATS with a strategic partner, bidding successfully for air space and air traffic control systems abroad. The Dutch were mentioned by the Minister; and we are told that other European countries are preparing to move in a similar direction. Some time ago, we heard that foreign ownership within any strategic partner would be limited to a minority shareholding. Accordingly, the British flag would fly abroad and the growth of the PPP would bring treasure to the United Kingdom and to the Treasury itself.
Unfortunately, as we debate the Bill the reality looks rather different. The shortest odds that one will get now is that NATS in a PPP will become a subsidiary of a foreign-dominated consortium. Ironically, it may be a consortium involving the publicly-owned German air traffic control provider, DFS, or indeed perhaps the Irish air traffic control provider, Aircom, or it could be a multinational American provider of ATC equipment. It may even be the same supplier that has supplied Swanwick so unsuccessfully for the past three or four years. It could be a state-dominated company from Europe such as Thompson CSF. We do not know, but we can be sure that that is why the staff are not particularly enamoured of the Government's proposals and why they would prefer to see a trust model. This they believe would meet, without any risk, the Government's objectives as stated in the Queen's Speech. It said simply that their programme would:
"include measures for National Air Traffic Services to separate safety regulation from operational matters"—
with which we all agree—
"and deliver major investment in the next generation of technology".
That, it seems, is where we have begun to move away from what would be a perfectly adequate way of dealing with the matter, outside the PSBR, without the
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constraints of the public sector and in a way that could raise the capital less expensively than in other ways—possibly possibly by using bonds.
The Canadian model bears examination. But that model has been traduced. We were told in another place that it is not accountable. That is not true. It is accountable to the Canadian Minister who is responsible for transport. Indeed, the point was made obliquely by the Deputy Prime Minister when he said that the Canadian Minister could issue instructions for safety and such; but that is the whole purpose of having direct accountability.
My worry is that, with a 70 per cent stakeholding of a private sector partner, in four or five years' time—in a PPP with 5 per cent in the hands of staff and 25 per cent, even with a golden share, in the hands of government—there will be less confidence among staff and users than there is at present. It is interesting that the airlines consortium, while approving the move away from the current NATS proposal, favours a not-for-profit organisation. The question is whether, even at this late stage, the Government can reconsider the proposal for a trust model. It is not true that it is without accountability. In Canada, the largest number of directors are appointed by government and follow government dictate. It was said in another place that there is no control over profits. But in the Canadian model there are no profits as the money is re-invested for the future investment and goes towards reducing costs to the traveller and the airlines. The record of the Canadian model since its introduction has been just that: increased investment and reduced cost.
One of the reasons why I very much favour the trust model is that it is hard to find a smaller group of people than those who favour the Government's PPP. There is a small group of people who want Connex SouthWest to have its franchise renewed. However, even the number in that group exceeds the number of those who want to see the PPP that is proposed for the privatisation of air traffic control services.
I believe that even at this late stage it is worth reconsidering the Canadian model to see how it can be applied, with suitable amendment, to the UK situation. It can provide everything that we need without the risks inherent in the Government's proposals. For that reason, I have much sympathy with this group of amendments.
Lord Smith of Clifton: I rise to support the amendment. I welcome the observations of the noble Lord, Lord Brett. The advantage of the public trust model is that it is a not-for-profit body and thus can concentrate on safety. It can also involve the parties who are most concerned: airlines, employees and government representatives. It has been suggested that there is a need for the injection of private sector management skills. Frankly, as it stands NATS has been proved to be replete with such skills in the discharge of its duties. If something more is necessary, it can be out-sourced, which is often a better solution than in-house provision, particularly in the case of project management.

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If we follow the trust model, NATS can raise funds more cheaply and easily. NavCanada's initial bond offer was three times over-subscribed. At Second Reading in another place the Secretary of State said that NATS would require £1·3 billion of investment over the next 10 years. The simplest and cheapest way to fund this proposal is for the Treasury to borrow the money long term on behalf of NATS. At present, the interest rate on 30-year gilts is 4½ per cent. Mr Prescott put it very clearly:
"NATS is denied access by restrictive Treasury rules to new forms of financing to fund the … investment required".—[Official Report, Commons, 20/12/99; col. 534.]
If, however, the Chancellor is not prepared to relax his grip, the second best option is to restructure NATS into an independent publicly-owned trust on the lines of the new Post Office or, even more appropriately, the Canadian model, as amended to suit UK needs, either with no outside shareholding or a modest shareholding made available to employees, such as the 5 per cent currently proposed in the Bill.
No substantial shareholding in NATS would be sold off, but the borrowing of NATS would no longer be subject to Treasury control because such borrowing would be "without recourse" to the Government. Borrowing in this way would cost more than issuing gilts—initial City estimates are that it would cost between ½ per cent and 1 per cent a year more; that is to say, 5 per cent to 5½ per cent per annum—but would be much cheaper than selling almost half the equity shares in a privatised NATS to investors who, quite naturally, would expect annual returns of between 10 per cent and 15 per cent.
No other country in Europe has privatised its air traffic control system. Holland, Germany and Austria have all set up new state-owned limited liability companies or trusts in the past few years and successfully raised long-term funds for capital investment at very favourable rates which reflect the high credit rating awarded by the markets to air traffic control revenues because they are guaranteed. NATS is not a competitive, commercial operation like British Airways where profit maximisation in an intensely competitive world market is the target. Air traffic control is essentially a service where safety and efficiency are paramount and where the key requirement is to deliver that service at the lowest long-term cost. High equity-type returns to outside investors are neither necessary nor appropriate because the risks of financial failure are so low.
Further, if the Government wish NATS to repay its existing debt of some £300 million to the National Loans Fund, there should be no problem in funding it by the issue of long-term bonds by the new NATS once it has been established as an independent publicly-owned trust.
At Second Reading in this House, the noble Lord, Lord Whitty, said:
"Our solution [partial privatisation] will mobilise private capital, not primarily through the sale, but through the ability to tap into capital markets over time, for huge investments are
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needed … It will provide a stable framework, which air traffic control has not had, because of variable funding, over the years".—[Official Report, 5/6/00; col. 1026.]
The Minister confuses ends with means. We all agree on the need to tap into the capital markets to fund investment, but an independent publicly-owned trust will be able to do just that as cheaply and reliably without giving away operational control and high returns to outside private investors.
The Government's plans for NATS are simply bad value for taxpayers' money. It is time to break the whole privatisation and PFI culture which pervades this Government and to examine proposals like this coolly, rigorously and on their economic merits. This was not in the Government's manifesto, and it is a part-privatisation too far. That was also the conclusion of the Select Committee of another place. Its report concluded:
"In one particularly striking way, the NavCanada model meets and exceeds another of the Government's objectives for the public-private partnership, because the Government would accrue revenue from the sale of 100 per cent of NATS. The IPMS and PCS suggested that the sale of NATS to a non-share capital corporation might generate £1 billion: if the company's debts are to be written off, and the fees payable to advisers are similar to those under the PPP, the Government would receive £670 million, considerably more than the [mere] £20 million it seems likely to receive under the PPP".
Lord Hoyle: Like other Members of the Committee, I would prefer that NATS remains completely in the public sector. I am still not persuaded that there is any good reason why the present situation cannot continue. However, if it is not to be in the public sector I believe that it should be a public company flotation very much along the lines of the Post Office. It would have freedom to borrow and would remain under public control. The third option is the trust model which is not about making profits. With such an organisation safety is paramount and no shareholder has to be satisfied. As my noble friend said, that model puts money back in, not only to reduce the cost to those who use the service but also to enable investment to take place.
During an earlier intervention I pointed out that the consultation document, which has already been discussed, warned that under these proposals investment might decrease rather than increase. My noble friend Lord Brett also gave that warning to the Minister.
It has been suggested that the trust model means that the organisation is unaccountable to anyone. It is also said that it will not be efficient because, not being responsible to anyone, it will not run the service efficiently or cut costs. However, the representatives on the board of the trust are the Government, the airlines which use it, the unions and consumers. All of those interests will bring pressure to bear to ensure that NATS is an efficient, modern, outward-looking body that is at the leading edge of technology. So far, such pressures have been applied; and not only have costs been reduced but investment has taken place.
Having said that I have a great deal of sympathy for the trust model, which I hope the Government will reconsider, I should add that I prefer a PPP to all-out

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privatisation. As I understand it, that is the position of the Conservatives opposite. I agree with the trust model. The Conservatives, who believe in complete privatisation, go along with the Liberal Democrats in what I termed a marriage made in hell. I cannot support them. That agreement is not made on the basis that the trust model is a better solution but as a result of seeking political advantage. If I thought that they believed in the trust model, I might agree with them. However, I cannot support their opportunism in getting rid of any principles they may have had in supporting the trust model. I shall abstain. However, I appeal to the Minister to consider the issue again. I ask him not to rule out the trust model but to consider whether we can adopt it.
6 p.m.
Lord Faulkner of Worcester: Unlike every previous speaker, including two of my noble friends on this side of the Chamber, I ask the Government to resist the amendment. I do not believe that the Canadian trust model is appropriate or workable for the future of air traffic control in this country. It would fall foul of European rules and make it impossible for us to play any part in the expansion of air traffic control services in the European Union or elsewhere in the world.
The trust model would not bring into the running of the organisation the world class strategic partner which NATS in future will need to complement the operational skills which our air traffic service has at present. There would not be sufficient incentives in a NavCanada type model for the organisation to improve its performance. For example, no shareholder scrutiny would be brought to bear on the operational efficiency or business development. The trust would have only debt; it would have no equity and no shareholders. They would not be putting their own money at risk.
Lord Brett: I apologise for interrupting my noble friend. Can he explain how the NavCanada model has produced greater investment and lower costs if the argument he puts forward are sustained?
Lord Faulkner of Worcester: The circumstances in Canada are very different from those which apply in Europe. The scale of operation which NATS in Europe is required to take on is larger. Shareholders put their own money at risk and want to see efficiency improved through participation in a PPP of the kind the Government propose in the Bill. That is likely to produce greater investment and opportunities for expansion in the future.
Baroness Thomas of Walliswood: Does the noble Lord consider that the accountability by the trust to the existing economic and safety regulatory systems—we are not interfering with them in any way—and its responsibilities to the board, its owners—it involves, users, airlines and so forth—are sufficient?
Lord Faulkner of Worcester: I do not think that that is sufficient accountability. However, that argument is
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not as important as the fact that the organisation will not attract the necessary private capital. The formula the Government propose will free NATS from Treasury financial control. Noble Lords on all sides of the Chamber agree with that.
Lord Hoyle: I am sorry to interrupt my noble friend; I know that it is somewhat unfair. He said that this model would not fit in with the European model. We would be the first partially to privatise air traffic control. How does my noble friend square that against the German model which is totally publicly owned?
Lord Faulkner of Worcester: My noble friend is brave to forecast the shape of air traffic control in Europe in five years' time with the introduction of the open skies policy. The circumstances then will be very different from now.
I support what the Government are doing because it will give NATS new commercial opportunities.
Lord Clinton-Davis: Before the noble Lord sits down, perhaps I may ask him this. He said that in five years' time the situation may be very different. It may; it may not. We are dealing with the current situation. Will the noble Lord indicate to the Committee his current beliefs?
Lord Faulkner of Worcester: I am delighted to do so. I am grateful for the intervention. In that argument, my noble friend omits an understanding of the scale of investment that will be required in air traffic control in future years.
I am happy to support the Government's proposal. They are cracking the problem of under-investment in the past. They are opening up air traffic control to a world class strategic partner. It will give the taxpayer the opportunity to share in some of the successes which will result from this new venture.
Lord Shutt of Greetland: I have difficulty following the noble Lord. Only the week before last, he was a most vigorous promoter of mutuality. That related to financial services. We seem to be in a different trade today. However, what he said the week before last and today seems to be at opposite ends of the spectrum. It is not a straight position to hold.
Lord Macdonald of Tradeston: New Clause 68 and its associated amendments seek to restrict the strategic partner to a not-for-profit company. The new clause would also require the Secretary of State to satisfy himself that the company includes representatives of employees and users of aviation, air travel, air navigation and related services.
I assume that one purpose of this new clause is to establish that profit will not be put before safety. Let me again assure noble Lords now that whatever type of strategic partner we select, whatever his nationality, whoever it is, profits will never be put before safety. This PPP will not jeopardise safety: rather it is designed to enhance the safety regime for air traffic control. Safety regulation will stay firmly in the public

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sector in a reformed CAA. The robust public sector regulatory regime will ensure that whatever the status or ownership arrangements for NATS, the company will remain one of the safest air traffic service providers in the world. In short I do not accept the "profit before safety" argument—and nor should other noble Lords. Perhaps I may respond to the context set by the noble Lord, Lord Brett.
Lord Smith of Clifton: I thank the Minister for giving way. In an earlier contribution he said that safety should be balanced with other priorities. One cannot balance one priority with another. One can only list priorities. Does he now say that safety remains the paramount priority and that the balancing act to which he referred would be a somewhat subordinate activity?
Lord Macdonald of Tradeston: As I thought I had said clearly, safety is paramount. I also said that if one is looking for absolutism in that kind of semantics, one will not find it in aviation or any other mode of transport.
I should like to offer a context, as did the noble Lord, Lord Brett, as to how we see the future developing in air traffic control. At present there are 49 centres in air traffic control in Europe. The skies over Europe are increasingly congested. We heard earlier suggestions of the growth rate which seems almost inexorable, whether the figure is 5 per cent or 6 per cent a year. It has been continuing for decades and there is no sign that it is about to stop.
We are told, too, that the technology would allow those skies over Europe to be controlled not by 49 centres but by around half a dozen. In the face of this economic imperative related to congestion—it is causing great difficulty for users, airlines and others—the advance of technology that is in prospect and the high cost of future investment of systems which might be beyond the reach of some smaller states, do noble Lords consider that the status of 49 air traffic centres across Europe is sustainable indefinitely? If they do not, I ask them to contemplate what process will take place to give us the rationalisation which seems inevitable.
Lord Clinton-Davis: I thank the Minister for giving way. I want to ask him a question because he is in charge of this matter. Can he indicate where, apart from the United Kingdom, governments are contemplating a scheme similar to that which he envisages?
Lord Macdonald of Tradeston: I can indeed. I would point the noble Lord to Holland. I have had conversations with the Dutch, who were minded to privatise their service but who are now interested in the variant of part-privatisation with which we are involved.
I believe that we have the potential to export the expertise that has been so well represented by my noble friend Lord Brett and his colleagues in air safety. If
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there were to be an end-game in which there might be half a dozen big players in a globalising industry, I should like to think that a British-based company would be a major player.
I want to stress again to the Committee that there is nothing in the legislation, or elsewhere, which would prevent a viable not-for-profit company from becoming our strategic partner. If such a company could pass all the eligibility criteria, if it could otherwise be made compatible with our proposals for the PPP—for instance, shareholdings—and if it put in a good bid, then a not-for-profit group could be the right partner for the Government.
However, in order for us to take a view on that, and for a not-for-profit group to prove that it offers the best future for NATS, there needs to be a competitive process which allows a rational assessment of all the bids we receive. Any not-for-profit bid needs to stand up and be assessed alongside other bids. Limiting the selection criteria to a not-for-profit group would knock out potential candidates who might at the end of the day be a better partner.
The second change which the new clause would make would be to require the involvement of representatives of employees and users of aviation in the ownership of a company. It is right to assert that such people have a crucial interest in the future of NATS. That is why we have devised the innovative stakeholders council. Although not part of the decision-making structure of the company, it will certainly be an influential body whose views will carry considerable weight. And the employees of NATS will, apart from their participation in that council, have a 5 per cent stake in our PPP.
The proposed amendment suggests that some Members of the Committee believe that a trust model, such as the NavCanada model, is appropriate for NATS. Such a model does indeed comprise representatives of government, airlines, unions and "independents" on its board but it is not itself accountable to anyone. Unlike the PPP, it is accountable only to the Canadian Government on safety matters. Transport Canada acts as safety regulator. But there is no other form of accountability. Nor is there any other form of economic regulation to encourage efficiency and market responsiveness. I also find it interesting that such a model is proposed by Members opposite when NavCanada itself refers to the setting up of the trust, which was followed by a massive re-organisation during the past three years, as "privatisation".
Yesterday I received the NavCanada annual report containing a message from its president and CEO. He stated:
"First came the privatization itself … to rebaseline our costs as a private sector company. This is a tough thing to do even at the best of times, particularly given the fact that it saw about 1,000 people leave the company over the last two years. On top of these enormous changes, we all had to deal with the process of renegotiating all of the collective agreements".

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He confesses that he has much to do to improve the employee climate and that morale has suffered.
Lord Brett: The Minister addressed the privatisation point. If in four or five years' time NATS has a 70 per cent private ownership, with 25 per cent held by the Government and 5 per cent held by the employees, it would be difficult for anyone in the City to see it as other than a privatised organisation. Day-to-day control would be given to the private sector on day one and the majority shareholding would be in the private sector.
I am prepared to accept that it is a part privatisation now, but if we are being challenged on the meaning of "privatisation", I have difficulty with a 70 per cent privatised public body.
6.15 p.m.
Lord Macdonald of Tradeston: We have said throughout that the most important issue is regulation, particularly in relation to safety. But in the construction of the PPP, and in the context of the global industry which I have described as consolidating inexorably, we have put in place a mechanism which will allow the public sector, the taxpayers, to share in what I believe will be the commercial success of such a company. I believe that opportunities will open up across Europe and around the world. I say to my noble friend Lord Brett that if there is dilution of equity and the Government end up with 25 per cent, that amount will give them no less influence than the 49 per cent which they had at the beginning. Furthermore, if they had 49 per cent of a company valued at £1 billion, in the years ahead they would be in a better position with 25 per cent of a company worth £5 or £10 billion. That is the purpose of what we are trying to construct.
At a distance, NavCanada may seem a neat, off-the-shelf alternative, but as my noble friend Lord Faulkner said, the circumstances there are very different and the process has been difficult for the employees involved.
Lord Williams of Elvel: I am sorry to intervene, but my noble friend earlier stated that security and safety was paramount. Later, in response to a challenge from the noble Lord, Lord Smith, he said that security was paramount subject to other issues. If the Minister can assure us that "paramount" means "paramount" as understood in the English language, I should be happier with the Government's proposal.
Lord Macdonald of Tradeston: I have tried on a number of occasions to make it clear that I do indeed mean that safety is paramount; that it comes before any other priorities which would face a commercial company of this kind.
I do not believe that the trust or NavCanada model would provide the platform to bring in a committed world-class strategic partner to inject the kind of expertise into NATS' operational skills that we require. The noble Lord, Lord Smith, stated that it had a fine record of management. It has an excellent record
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of management on the safety side and that is a tribute to the employees. Unfortunately, I do not believe that we have the same record of success as regards the control of major projects such as Swanwick and the new Scottish centre. I believe that we could have done much better with the kind of private sector expertise which would be introduced under our PPP proposal.
We do not believe that the NavCanada model would bring shareholder scrutiny to bear on NATS' operational efficiency or business development because it has no equity, only debt. Without shareholders who would have put their own money at risk, the incentive would be lacking and all costs, irrespective of the level of inefficiency that caused them to be incurred, would be passed on to users in the form of higher charges than would otherwise be the case.
A final area of doubt relates to the ability of the trust model to compete effectively in the liberalised world market for air traffic control which I believe will soon confront us. Therefore, I believe that the new clause and its associated amendments are unnecessary and I invite the noble Baroness to withdraw her amendment.
The purpose of new Clause 69 and its associated amendments would be to require Parliament to pass further secondary legislation before any transfer schemes could be put into effect. It would also require the Secretary of State to produce a progress report on the development of NATS facilities before any secondary legislation could be considered. The new clause and its associated amendments would result in a time-consuming and cumbersome mechanism. The proposed schemes would be subject to consultation with those concerned, and would be designed to achieve the complete separation of regulation from service provision. Parliamentary approval to each scheme is entirely unprecedented and could jeopardise the PPP timetable.
The requirement for the Secretary of State to produce a report on the development of facilities connected with National Air Traffic Services is also entirely unnecessary. I assume that that has been inserted in order to place on the face of the legislation some commitment to the Prestwick centre. That commitment will of course be contained in the strategic partnership agreement and it will also be a licence condition. In addition, the Government accepted an amendment in another place which will reinforce these commitments on the face of the legislation. That amendment is now Clause 51 (3).
I have dealt at length with a number of proposals for new clauses and for other amendments to the Bill. For the reasons that I have given, I urge your Lordships to reject the amendments proposed.
Baroness Thomas of Walliswood: The noble has Lord made a spirited defence of his proposals, or, perhaps it is more correct to say, an attack on my proposals. As a result of listening to him, I am more and more convinced of the truth of what the noble Lord, Lord Brett, said. He made the point that the motivation for this whole scheme seems to have

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transmogrified from a simple effort to evade the limits of the public sector borrowing requirement to become a kind of banner-carrying imperialist company which will march around the air traffic control systems, not only of Europe but of the entire world, and bring in revenue for shareholders and the Government alike.
The Minister then challenged us to imagine what the process of air traffic control would be and how we would arrive at the smaller number of air traffic centres that are supposed to be forecast for the future. I am unable to do that. If the noble Lord can do so, he should have explained it to us. I believe that with the resources at his command he is in a better position to make a forecast on such a matter than are we on these Benches. However, I know that the first step in achieving any kind of rationalisation of air traffic control on the continent of Europe has hardly been taken. We have hardly begun to co-operate with the existing air traffic organisations. That surely is the first desirable step in enabling us to make a better fist of air traffic control in Europe.
After the ability to co-operate has been established, matters will be decided not only by this country but by air traffic control organisations and governments in every country. I invite Members of the Committee to consider the likelihood of, let us say, the French allowing a British company to take over air traffic control in la belle France. The French are very happy to come and buy our water, and our post-privatisation process allows them—one might say rightly or wrongly, according to one's point of view—to do that, but I doubt that such an arrangement will be reciprocal.
I shall not go through—
Lord Clinton-Davis: Before the noble Baroness sits down, we have heard from the Minister only that he has had discussions with the Dutch. That is all. It does not mean to say that the Dutch will do precisely what the Government propose—not at all. Therefore, apart from discussions which the Minister has had, what kind of evidence is there that any other system is available anywhere in the world?
Baroness Thomas of Walliswood: I am grateful for that interruption from the noble Lord, Lord Clinton-Davis, who speaks with all the experience of years in government and on your Lordships' Benches. In the context of what he says, it is perhaps worth pointing out once again that the United States, arguably the country most devoted to the private competitive system—capitalism—is the country in which every single air movement, made by no matter whom and by whatever size of aeroplane on whatever business, whether commercial or otherwise, is regulated by a federal organisation funded entirely from taxation—and not as is NATS, by the charges raised from the operators of airlines. Therefore, I believe that the noble Lord's point is well made and I thank him for interrupting me for that purpose.
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I believe that no useful purpose will be served by taking this discussion further. We shall retire this evening to consider our next best action. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 20:
Page 4, line 12, at end insert ("and the legal and beneficial ownership of a majority of shares carrying voting rights in such a company, and the control of such a company, is vested in a person who is a British citizen.
( ) For the purposes of this section references to "control" shall be interpreted in accordance with section 840 of the Income and Corporation Taxes Act 1988 and the expression "controlled" shall be construed accordingly.").
The noble Lord said: In moving Amendment No. 20, I should like to speak also to Amendments Nos. 21, 79 to 84, 91, and 105 to 107. The main amendment in this group, if I may express it that way, is Amendment No. 84. I did not want to disappoint the Committee, and Amendment No. 84 proposes a full-scale privatisation of National Air Traffic Services with an offer for sale and all that goes with it.
I was fascinated by the debate on the previous amendment. However, as I believe that the noble Lord, Lord Hoyle, said, our preferred option is a full-scale privatisation. As I said, I did not want to disappoint your Lordships by not moving the amendment or sticking to my guns. Also grouped with that main amendment are a number of other, perhaps more detailed, amendments to the Government's proposals, particularly with regard to the issues of national security, foreign ownership, the golden share and so on. I have grouped them together in order to save us a little time.
As I said at Second Reading, we believe that the partial privatisation, or public/private partnership, or however the Government like to describe it, proposed in the Bill is an under-valued and convoluted compromise. Instead of a simple flotation of the company with a golden share to provide for permanent UK control, the Government public/private partnership is, as I say, a somewhat convoluted compromise. They plan to sell a 46 per cent interest to a trade bidder—as has been said, possibly a foreign bidder—who will be given control of the business at what we believe to be a knock-down price. Foreign control could have serious national security implications.
We have heard mentioned a number of names as possibilities for the strategic partner, including the Airline Group and some companies which—again, this gives me something of a problem—appear to be large-scale suppliers of equipment to National Air Traffic Services. Therefore, one could end up with a situation where the strategic partner is one of the main suppliers to National Air Traffic Services. Presumably that would have competition implications for whomever NATS buys its equipment from in the future.
There is also the question of giving 5 per cent of the shares to the staff. I do not know how that will work. As the company will not be quoted, the staff will not

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be able to buy or sell their shares and they will not feel that they have any ownership of them. The artificial voting arrangements to protect the controlling minority stake are bound to be problematic, because the three-way split will inevitably lead to confusion over who is in day-to-day control.
The Government are underselling NATS. The explanatory notes say that they will sell it off for just £15 million, against a valuation of around £800 million. In Amendment No. 84 we propose a straightforward flotation, with a golden share to protect the Government's position. That will have the benefit of giving employees a market for their shares and therefore real value. We want the shares to be sold at the best price reasonably obtainable, not for the paltry sum that the Government envisage. We also want share ownership to be as wide as possible, not the exclusive partnership that the Government have opted for.
We also propose a delay in the sale, as we believe that it would be much better to wait until Swanwick is up and running. I think that 2002 is the latest estimate. The Government would then have a much better idea of the value of the company.
Above all, in the interests of national security, we want control of the company to remain firmly in British hands.
6.30 p.m.
Lord Clinton-Davis: Amendment No. 107 says:
"Nothing arising from the European Communities Act 1972 shall limit the powers of the Secretary of State to give directions under this section".
Has the noble Lord consulted the European Union about that? Does he believe that he can advance that amendment?
Lord Brabazon of Tara: I have not consulted the European Commission. I am proposing amendments to a government Bill. It is not necessarily for me to give details about how the amendments might work. It is for the Government to respond to the points that I make.
Lord Clinton-Davis: That really will not do. The noble Lord is putting forward ideas for amending the Bill. Those ideas must be in line with European law. Whatever his views about the European Union, his idea must be viable. If it is not viable under international law, he should not advance it to the Committee.
Lord Brabazon of Tara: I shall come to those amendments and explain why we feel that they are necessary to cover a certain eventuality.
I shall be as brief as I can. Clause 5(4) provides for the licence holder to be a British-registered company. But a British-registered company can be in the hands of an overseas national, possibly one from an unfriendly state. In the interests of national security,
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the amendments would require that the licence holder be British-controlled and that the licence be forfeit if that ceases to be the case.
The noble Lord, Lord Clinton-Davis, may have been referring to the amendments that deal with the golden share. The European Commission has recently challenged the Government's ownership of golden shares in other companies, particularly BAA, claiming that the Government are infringing EU law on the free movement of capital. We believe that it should be made clear in the Bill that the crucial provisions on the golden share stand, regardless of anything in European law.
Lord Clinton-Davis: But—
Lord Brabazon of Tara: I have given way enough to the noble Lord and I shall press on if I may.
Clause 51 relates to the ownership of the public/private partnership. I cannot see the logic of subsections (4) and (5), which provide for the Government to retain 49 per cent of the issued shares initially, and thereafter not less than 25 per cent. The initial 49 per cent can apparently be diluted by subsequent issues, so what is the point of it? It does not leave the Government with overall control of the company—for that they would need 51 per cent. With 5 per cent going to employees, there will he two big blocks of shares, neither of which gives control of the company. That is a recipe for confusion and rudderless management.
The provision for the retention of 25 per cent is even more baffling. It would make more sense to retain 26 per cent, because that would at least give the Government the right to block any measure that required a special resolution, whereas 25 per cent gives no rights. If proper provision is made in the articles of association to protect the Government's position, there should be no need for the retention of a block of shares.
Amendment No. 83 would delete Clause 51(12). Clause 51 is the key to this part of the Bill, containing vital provisions for national security and establishing the future framework of the country's air traffic service. It has rightly been subjected to intense scrutiny by Parliament and is a subject of considerable controversy, yet the Secretary of State wants to give himself the power to change or scrap it at will. That is unacceptable. Any changes deserve the same parliamentary scrutiny as the original clause.
That describes the general thrust of our amendments, which relate particularly to national security and what happens during times of emergency or international tension. They also deal with the golden share and the central issue of foreign ownership.
I am particularly concerned about the Government's proposals in the light of the report from NATS and the CAA Economic Regulation Group. I have assumed that the point of the exercise was to increase investment, not to reduce it. I do know whether all noble Lords have seen a copy of the

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document. I hope that the Minister will be good enough to make sure that a copy of it is placed in the Library.
I am greatly concerned about the savings of between 16 and 29 per cent in capital expenditure in the first quinquennium that the document considers, in addition to the 7·5 per cent efficiency gain. I have a number of questions for the Minister on that. What assessment has he made of the safety implications of cost reductions in the operations of NATS, as recommended by the Economic Regulation Group? Secondly, what representations have the Government received from the management of NATS, the Institution of Professionals, Managers and Specialists—the controllers' union—and the Guild of Air Traffic Control Officers about the cost reductions in the operation of NATS, as recommended by the ERG? I do not know whether the noble Lord has seen the press releases from both IPMS and the Guild of Air Traffic Control Officers but I think he must agree that they make quite damaging reading.
Thirdly, will the Minister say what is the forecast for capital spending by NATS in the current year and for the next five years and what increases in capital spending are anticipated as a result of the proposed public/private partnership? Can he tell us something about the companies or organisations which have expressed an interest in becoming a strategic partner in NATS and whether he has received any representations from them about forecast capital spending in NATS over the next period of time. I feel that we really deserve an answer to those questions.
Lord Brooke of Alverthorpe: I am grateful to the noble Lord for giving way. I am becoming confused. I understood that the noble Lord was moving an amendment for full privatisation. I listened carefully to the noble Lord earlier when he expressed concerns about the documents that have emerged which are on the Internet in relation to the Economic Regulation Group of CAA looking for cuts in capital expenditure and in running costs. I ask the noble Lord to clarify how he can advocate privatisation while at the same time expressing concerns about cuts of that nature being effected because privatisation would be required to effect efficiency savings in some way or another to pay dividends to shareholders.
Lord Brabazon of Tara: I said that I was moving the amendment on pure privatisation as well as speaking to other amendments to improve this particular PPP.
At the moment, the Government are not offering pure privatisation. Therefore, it is not what the ERG of the CAA is looking at for the time being. Our amendment provides that there should be a delay until such time as Swanwick is open. But the noble Lord makes the point that a privatised air traffic service will have to make profits and pay a dividend to its shareholders. Therefore, the noble Lord can make exactly the same point to the Minister on the public/private partnership because, as was said earlier, that is, in effect, a privatisation. If the shareholding falls, as it
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can do, down to a mere 25 per cent holding by the Government, then the noble Lord will find himself in exactly the same boat.
I look forward to receiving the Minister's response on these matters. I beg to move.
Lord Clinton-Davis: I sympathise with the former Minister for Aviation, the noble Lord, Lord Brabazon. At the moment, he does not know whether he is arguing for privatisation or not. So we have every possible sympathy with him.
This is a nonsensical series of amendments which has nothing to do with reality. I share the noble Lord's appreciation of what the Minister will do with it: he will kick the idea into the long grass, and that is where it deserves to be.
The Conservative Party has had 18 years to get the situation right and it chose not to do that. The Conservative government made a mess of NATS because they did not know what to do. I do not believe in the prescription of my noble friend, but what is being advanced now is of no consequence whatever.
6.45 p.m.
Lord Macdonald of Tradeston: Earlier in your Lordships' House, I saw the noble Baroness, Lady Thatcher, who would be dismayed to hear the halfhearted way in which privatisation was advocated by the noble Lord, but I can quite understand his embarrassment in this context and why he has not pursued it as full-bloodedly as one might have expected.
I deal first with a question which I thought we had despatched some time ago. I am grateful to my noble friend Lord Brooke for pointing out that the document which the noble Lord asked me to put into the Library has been available publicly on the Internet for many weeks now. As I stressed earlier, it is a consultative document.
Indeed, I have spoken to the management of NATS about it. Its chairman assured me that it was part of the robust consultative exchange that one would expect between the regulator and regulated in this period. We have received no direct representations from NATS or IPMS in relation to it. I repeat that it is still a process of consultation.
The noble Lord raised the question of capital spending. I do not have the schedule for the year-by-year intentions and capital investment. He will be aware that because of the confusion and incompetence of the PFI plans which we inherited from the previous government, we have had to redo the programme for investment, certainly for the new Scottish centre, and we had to take measures elsewhere to rephase that capital investment. But I assure him that we still expect to invest £1·4 billion over the next 10 years, as we have continually stated, and whatever more is needed to secure the necessary improvements in air safety.
I turn now to this wide-ranging group of amendments which I shall deal with in three tranches. The first tranche concerns Clause 5. The purpose of Clause 5(4) is to underpin the special administration

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regime in Clauses 26 to 33. If we have a licence holder which is not a company formed and registered under the Companies Act 1985, or predecessor Acts, or the equivalent in Northern Ireland, we should not be able to ensure the effective enforcement of the special administration regime.
The noble Lord's amendment seeks to introduce a nationality qualification into the ownership of the PPP. The Government do not see the nationality of a potential strategic partner as the sole consideration—or even the most important one. The Government would certainly rule out any prospective bidder, British or otherwise, who was not acceptable on grounds of national security or whom we did not consider a fit and proper person to have charge of our air traffic control system. We are developing stringent and objective selection criteria which will enable us to find the best strategic partner for the job. And that is an issue of quality, not nationality.
The noble Lord, Lord Brabazon of Tara, also seeks to set some parameters to what should constitute control of the company. I hope I can reassure the Committee on this matter. The licence holder will be obliged by his licence to notify the Secretary of State of any change to shareholdings which would result in an individual shareholding exceeding any one of a series of threshold levels—15 per cent or 30 per cent or 50 per cent—where it had not previously done so. If notification did not occur, or if the change went ahead despite an objection from the Secretary of State, the licence could be revoked under its own terms if the Secretary of State objected to that change because it was against the interests of national security and the objection was ignored.
The threshold of 15 per cent is important as it is the level at which a shareholder is able materially to influence the operation of a company. I should say in passing that from my business background I should not have accepted the discrimination which the noble Lord made between 25 per cent and 26 per cent. But perhaps we can look at that later. The safeguards we are building into the licensing framework, therefore, offer far greater protection for national security than would the amendment.
The second tranche of amendments in this group focuses on Clauses 51 and 56. Amendment No. 79 introduces for the first time the inter-relationship of community and national law. That relationship has already been raised extensively in another place. However, I shall touch on that point in more detail when I come to address the amendments in respect of Clause 93.
The Government are convinced that the outright privatisation of NATS, which noble Lords opposite advocate, would be a mistake. At least 51 per cent of the company would have to be sold and there would be no requirement for the Government to retain any shares. Yet, air traffic control is an area where the benefits of a partnership between the public and private sectors are very apparent. The proposed new clause would dispense with those benefits and deprive the people of this country of a voice in the management
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of air traffic control, which will increasingly be an international activity. Furthermore, as I said earlier, our aim is to facilitate the development of a major British-based company, successfully going out and working in air traffic control in countries around the world, not in any imperialistic sense, as the noble Baroness opposite suggested, but trying to deliver greater safety for those countries and for all the airlines, including British airlines, which serve them.
I note the suggestion in the amendments that British interests must control the company. I have already explained why I believe that to be wrong. Moreover, in the case of European Union nationals, it would not be compatible with our EU obligations.
As I have said, we expect air traffic control markets to liberalise over time. I do not think that we are alone in that. Our Dutch and other European colleagues are looking at those options. We want NATS to be at the forefront of the changes that we expect to see. We therefore want to be able to enter into co-operative arrangements, joint ventures and the like that will almost certainly figure in the markets of the future. In those circumstances, it makes no sense to adopt too insular an approach.
Amendments Nos. 81 and 91 seek to make provision for the special shareholder to he able to prevent a transfer of securities in NATS, other than the special share, on the grounds of national security. The first point to consider is when such a right might take effect. During the PPP there will be a strategic partnership agreement in force which will require the consent of the Secretary of State for each and every transfer of shares in NATS.
It seems, therefore, that the right proposed by noble Lords would be of use only following a flotation of NATS. The Government have no present intention of permitting such a flotation. However, even if a flotation was permitted, NATS' articles of association have been drafted in such a way that there would be a 15 per cent limitation on individual shareholdings in the floated company. That limitation would prevent anyone other than the Crown from obtaining an influential stake in a floated NATS. In addition, NATS would remain subject to its relevant licence obligations, which I have described.
Amendment No. 82 seeks to prevent any successful challenge to the special share under any European law which the European Community may make. As noble Lords will understand, this is not an amendment which can be accepted as the United Kingdom has signed and agreed to be bound by the Treaty of Rome, as amended. Furthermore, the European Commission has a legitimate interest in ensuring compliance with the fundamental community freedoms of movement of capital and right of establishment.
The legal advice we have is that the NATS special share scheme arrangements are compatible with those freedoms. I have to say that the apparent intention of the amendment to entrench the special share rights as a state measure rather than reinforcing provisions of private company law, as we intend, might well be unwise in this context. Given the strength of the

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Government's position, if the Commission were to institute proceedings against the UK on NATS, the Government are prepared to defend their position on the special share.
I turn to Amendment No. 83. I consider that the proposal to remove the right of the Secretary of State to amend or repeal the section is unnecessary. The exercise of this power is subject to the approval of both Houses of Parliament under the provisions of Clause 102(6) of the Bill. Moreover, in its report on the Bill the Select Committee on Delegated Powers and Deregulation commented that it did not see this power as inappropriate, and saw the affirmative procedure as providing appropriate control over its use.
I turn to the third tranche of amendments in this group concerning Clause 93. Amendment No. 105 seeks to provide a power for the Secretary of State to direct the CAA or a licence holder regarding the performance of its functions if thought appropriate to do so in the interests of national security. We already have such a power by virtue of Clause 38 of the Bill and Section 6 of the Civil Aviation Act 1982. The latter provision is not being repealed.
Clause 38 provides that a licence holder may be given directions, either of a general character or specifically to do or not to do a particular thing if the Secretary of State thinks it necessary or expedient to do so in the interests of national security.
Section 6 of the Civil Aviation Act 1982 gives the Secretary of State similar powers of direction in respect of the CAA. It is against that background that the Government take the view that adequate and comprehensive powers are already provided for in the Bill. It is our view that the amendment is simply unnecessary.
Amendment No. 106 seeks to allow the Secretary of State to give directions to a person following an air traffic administration order. We think that that amendment too is superfluous. My advice is that the reference to a person who provides air traffic services, in the list of those to whom a direction may be given, clearly includes someone who does so under an air traffic administration order.
Amendment No. 107 endeavours to ensure that the direction-giving power in Clause 93 may be exercised even if the directions so given were inconsistent with the European Communities Act 1972. I should perhaps restate the obvious. We have signed and agreed to the Treaty of Rome, as amended.
I hope that I have demonstrated that, while we share the very reasonable concerns of the party opposite about national security, the amendments are either unnecessary or inappropriate. Perhaps I may say to the noble Lord, Lord Brabazon of Tara, that we have tried repeatedly to make clear that the arithmetic he used to arrive at £15 million net for NATS was not correct. We have tried to explain that detail in a number of places and, indeed, in the Explanatory Notes. The noble Lord has not taken account of how the debt will be treated inside that sum.
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The £15 million quoted arises from confusion around the treatment of the £300 million debt that NATS owes to the National Loans Fund. That has to be extinguished prior to the PPP as private sector bodies cannot borrow from the NLF. The estimated figure of £350 million stated in the Explanatory Notes for the proceeds from NATS from PPP is net of that debt. Consequently, taking account of current estimates of the cost of the sale, that would give potential final receipts of over £300 million plus the benefit of another £300 million debt repayment. It would probably be of more use to have used the concept of enterprise value to find a total. However, this is an estimate. The final proceeds could well be higher, depending on the level of bid received from potential strategic partners. We have no intention of letting NATS go at a knock-down price, as the noble Lord suggests. Accordingly, I invite the noble Lord opposite to withdraw his amendment.
Lord Brabazon of Tara: I am grateful to the Minister for his reply. I shall read carefully what the Minister had to say on the detail of my amendments. I really do take issue with the noble Lord, Lord Clinton-Davis, when he argues that they are of no importance or significance. I believe that national security, the golden share and foreign ownership are matters of great importance. Indeed, they are issues which are covered in the Bill, so they must be important.
Lord Clinton-Davis: I was referring to Amendment No. 107. The noble Lord seeks to do something which is incompatible with European law. He should not put forward that argument before this Committee.
Lord Brabazon of Tara: I have put forward that argument. I have listened to the reply given by the Minister. To that extent, it is a useful exercise. We must be allowed to put forward amendments. The noble Lord, Lord Clinton-Davis, also accused the previous Conservative government of not doing anything about national air traffic services. A great deal of money was invested in that during the period of the previous government. As we all know, a great deal of money still needs to be invested. The problem has arisen, of course, of persuading the Treasury to let that money be borrowed from the PSBR. That affects this Government just as it affected the previous one. So we appreciate that something needs to be done to allow NATS to receive capital investment. I was encouraged to hear the Minister repeat the fact that we are still looking at a figure of around £1.4 billion over the next 10 years.
As I said, I am grateful to the Minister for his responses to my individual amendments. But I turn now to our main amendment, which is a proposal for complete privatisation. Of course, it would involve selling 51 per cent of the company. I see no harm in doing that. It was exactly what happened in privatisations such as British Telecom, which were slated by the party then in opposition and which turn out to have been a great success. That success has been repeated throughout the world. The Minister is right

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to say that there will be potential for overseas involvement by the new company when more liberalised air traffic control systems are introduced throughout the world. That would be so in a fully privatised company. So there is no difference in that respect.
I do not like the proposal that the Government have now put before us—for different reasons from those put forward in the previous debate on the Canadian trust model. I should like to promote the idea of total privatisation and therefore seek the Committee's opinion on Amendment No. 20.
7.1 p.m.
On Question, Whether the said amendment (No. 20) shall be agreed to?
Their Lordships divided: Contents, 31; Not-Contents, 127.

Division No. 1

CONTENTS

Astor of Hever, L.

Marlesford, L.

Attlee, E.

Moynihan, L.

Brabazon, of Tara, L.

Murton of Lindisfarne, L.

Burnham, L. [Teller]

Northbrook, L.

Cope of Berkeley, L.

Norton of Louth, L.

Denham, L.

O'Cathain, B.

Dixon-Smith, L.

Onslow, E.

Park of Monmouth, B.

Fookes. B.

Peel, E.

Geddes, L.

Renton, L.

Glentoran. L.

Seccombe, B.

Hanham, B.

Skelmersdale, L.

Henley, L.[Teller]

Soulsby of Swaffham Prior, L.

Kingsland, L.

Swinfen, L.

Lyell, L.

Weatherill, L.

Mackay of Ardbrecknish, L.

Wilcox, B.

NOT-CONTENTS

Acton, L.

Currie of Marylebone, L.

Addington, L.

Dahrendorf, L.

Alderdice, L.

Davies of Oldham, L.

Alii, L.

Desai, L.

Amos, B.

Donoughue, L.

Andrews, B.

Dormand of Easington, L.

Archer of Sandwell, L.

Dubs, L.

Ashton of Upholland, B.

Elder, L.

Bach. L. [Teller]

Falconer of Thoroton, L.

Barker. B.

Farrington of Ribbleton, B.

Bassam of Brighton, L.

Faulkner of Worcester, L.

Beaumont of Whitley, L.

Filkin, L.

Berkeley, L.

Gale, B.

Bernstein of Craigweil, L.

Gavron, L.

Blackstone, B.

Gibson of Market Rasen, B.

Borrie, L.

Gilbert, L.

Bradshaw, L.

Gordon of Strathblane, L.

Bragg, L.

Goudie, B.

Brennan, L.

Gould of Potternewton, B.

Brett, L.

Graham of Edmonton, L.

Brooke of Alverthorpe, L.

Greaves, L.

Brooks of Tremorfa, L.

Grenfell, L.

Burlison, L.

Hamwee, B.

Carter, L.

Harris of Greenwich, L.

Chandos, V.

Harris of Haringey, L.

Christopher, L.

Harrison, L.

Clarke of Hampstead. L.

Hayman, B.

Clinton-Davis, L.

Hogg of Cumbernauld, L.

Cocks of Hartcliffe, L.

Hollick, L.

Crawley, B.

Hollisof Heigham, B.

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Howells of St. Davids, B.

Redesdale, L.

Howie of Troon, L.

Rendell of Babergh, B.

Hoyle, L.

Rennard, L.

Hughes of Woodside, L.

Renwick of Clifton, L.

Hunt of Chesterton, L.

Richard, L.

Hunt of Kings Heath, L.

Rodgers of Quarry Bank. L.

Irvine of Lairg, L. {Lord Chancellor)

Sainsbury of Turville, L.

Sawyer, L.

Islwyn, L.

Scotland of Asthal, B.

Janner of Braunstone, L.

Serota, B.

Jay of Paddington, B. (Lord Privy Seal)

Simon, V.

Smith of Clifton, L.

Jenkins of Putney, L.

Smith of Gilmorehill, B.

Layard, L.

Stoddart of Swindon, L.

Lea of Crondall, L.

Stone of Blackheath, L.

Linklater of Butterstone, B.

Symons of Vernham Dean, B

Lipsey, L.

Thomas of Gresford, L.

Macdonald of Tradeston, L.

Thomas of Walliswood, B.

McIntosh of Haringey, L. [Teller]

Tomlinson, L.

Tugendhat, L.

Mackenzie of Culkein. L.

Turnberg, L.

Massey of Darwen, B.

Turner of Camden, B.

Merlyn-Rees, L.

Uddin, B.

Mitchell, L.

Walker of Doncaster, L.

Molloy, L.

Warner, L.

Morris of Castle Morris, L.

Warwick of Undercliffe, B.

Nicol, B.

Wedderburn of Charlton, L.

Oakeshott of Seagrove Bay, L.

Whitaker.B.

Parekh, L.

Whitty, L.

Phillips of Sudbury, L.

Wilkins, B.

Pitkeathley, B.

Williams of Crosby, B.

Ponsonby of Shulbrede, L.

Williams of Mostyn, L.

Prys-Davies, L.

Winston, L.

Puttnam, L.

Woolmer of Leeds, L.

Ramsay of Cartvale, B.

Young of Old Scone, B.

Resolved in the negative, and amendment disagreed to accordingly.
7.11 p.m.
[Amendment No. 21 not moved.]
Clause 5 agreed to.
Baroness Farrington of Ribbleton: This may be a convenient moment for the Committee (on Recommitment) to adjourn during pleasure. Perhaps I may suggest that these proceedings begin again not before ten minutes past eight.
[The Sitting was suspended from 7.12 until 8.10 p.m.]
Clause 6 [Licences: grant]:
[Amendments Nos. 22 to 29 not moved.]
Clause 6 agreed to.
Clause 7 [Licences: provisions]:
[Amendment No. 30 not moved.]
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 31:
Page 6, line 8, at end insert—
("(5A) A licence shall include provisions requiring the holder to indemnify operators and owners of aircraft, owners and managers of aerodromes, persons travelling in aircraft and persons with rights in property carried in them against, and to pay compensation in respect of, economic loss occasioned by air traffic control delays attributable to the holder.
(5B) For the purposes of subsection (5A), a licence shall set out the circumstances in which air traffic control delays shall be regarded as attributable to the holder: or shall make provision for an arbitration system, other than through the Civil Aviation Authority, to determine attribution of air traffic control delays.").
The noble Lord said: In moving Amendment No. 31, I wish to speak also to Amendment No. 34.
It is understood that the licence will incorporate performance targets designed to improve the service to airlines and other users by establishing an incentive to reduce air traffic control delays and other inefficiencies which cause annoyance among the travelling public, cost airlines significant sums and have significant environmental disbenefits. For example, Eurocontrol estimates that between a quarter and half a million tonnes of fuel are unnecessarily burned each year because of poor ATC. That is mostly over Europe; our performance is considerably better than that.
The question is: what happens if NATS fails to meet its targets? One option, which we understand is currently preferred by the Government, is to adjust the price cap on an annual basis. A better alternative, we believe, would be to expose NATS to the discipline of the market by placing it under the same obligation as most suppliers of services through a requirement to provide an indemnity against economic loss in circumstances where the loss can reasonably be attributed to NATS—recent computer failures are an obvious example of that—and to require that compensation be paid if performance targets are not met over a defined period. As we have said, this is established commercial practice and it works well. The Government's proposal would mean that carriers might have to wait a year for their losses to be offset by reduced charges and passengers would have no established right to be compensated. The alternative I propose would be faster and fairer.
It might be suggested that NATS is unlike a commercial organisation in that it is a regulated monopoly. However, this principle of combining the giving of incentives through a variable charging formula with financial penalties is not novel as the Government already endorse it in respect of another transport infrastructure provider; namely, Railtrack. The only difference between this model and that applying to Railtrack is that the scope for personality clashes between the regulator and NATS would be avoided by setting out the compensation criteria in the licence exactly as they would be in a commercial contract, for example, if an outside organisation were to run NATS' systems for it. Indeed, NATS has been proud of the fact that the existence of such clauses in its contract with Lockheed Martin has avoided additional burdens on the taxpayer by requiring the company to pay its share of the overrun cost of the new Swanwick centre. If it is considered acceptable for NATS to place its suppliers under this requirement, I submit that there is no reason why NATS itself should not face such an obligation as a supplier of services.
Furthermore, new EU proposals on passenger rights propose that airlines should have to pay compensation for delays. If airlines have to compensate passengers for factors which are often beyond their control, why should NATS not have to compensate for controllable errors? We ask the Government at least to sit down again with users to
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discuss this option. This is what NATS' customers believe to be in their best interests. It must be remembered that the service is provided for them.
I turn to Amendment No. 34. The relationship between NATS and its customers has not always been a happy one, largely because NATS has never had to bother about its market. It is a natural monopoly; there is nowhere else to go. It has the statutory right to levy charges. Under the circumstances it is always tempting for a public sector body to regard its sponsoring department as its number one priority and its customers as a distant second. However, NATS' operating costs are as a result funded by airlines, not the general taxpayer, to the tune of several hundred million pounds a year. As NATS has been keen to gain airlines' support for its desire to gain greater commercial freedom, it might be expected that it would have sought greater involvement on the part of its customers because Ministers, after all, act only in loco parentis in this respect, and the child is perfectly capable of looking after itself.
Yet, to date, NATS has never sought to consult airlines on the service they want. Regular "consultation" meetings are held but these are largely PR exercises designed to tell the industry what NATS has done rather than genuine attempts to find out what the customer needs. The real planning takes place between NATS and DETR. Users are "consulted" after decisions have effectively been made. For example, the first the airlines knew of the plan for a second en route centre was when they received a press release from the Transport Select Committee in another place announcing that it was holding an inquiry on the subject!
The proposal to create a stakeholder council in my view does not fully address that shortcoming as the council will have no locus in relation to economic issues and it is currently proposed in the draft licence that NATS should have sole responsibility to prepare and implement plans it believes are necessary to provide a safe and efficient service. In that connection, NATS has referred in its recent response to the CAA's critical comments on the proposed regulatory structure that it has been developing one, five and 10-year plans. We note that no attempt was made to involve its customers in the development process. A truly market-driven service provider would have sought customers' views at the outset, not once the plan had been completed. This amendment is designed to make NATS into such a service by requiring it to sit down with users at the outset and to prepare its plans in partnership with them. We would be concerned if NATS were to oppose this and we would question any response that suggests that safety must take priority over users' needs, as airlines and their passengers know all too well that if anything goes wrong with the system the impact falls on them. I beg to move.
8.15 p.m.
Lord McIntosh of Haringey: I thought that the noble Lord's description of the separation of responsibility between the airlines and NATS came rather well from a former member of a government which privatised the

1663
railways and distinguished between Railtrack and the train operating companies. Perhaps the noble Lord spoke from bitter experience. However, I was grateful that he did not refer—as I thought he might—to the problems with the LATCC systems failure the other weekend. He was right not to refer to that as problems on that scale are rare. NATS believes that the changes made to the system that failed will return it to its previous level of 99.99 per cent service.
The problem of delays—to which Amendment No. 31 refers—is an international one and can be addressed comprehensively only at international level. Through the PPP we intend to take steps to encourage NATS to raise its game. The licence will provide a direct financial incentive for NATS to keep delays down. We shall be setting a cap on NATS' charges for the first five years. If delays increase, the charge control conditions in the licence provide for the charge cap to be tightened, so that NATS will be penalised by being obliged to reduce charges. This will provide recompense for operators affected by delays attributable to NATS. This squeeze on charges through the licence will provide an incentive for NATS to minimise delays. A reduction in charges and costs does not mean a reduction in safety as some people might like us to believe. The financial regimeunder which NATS has operated until now has offered no incentives whatsoever for it to make cost efficiencies on most of its business. We shall be remedying that, and if delays occur NATS will feel the pain, but the pressure will not be such as to encourage it to take shortcuts to reduce delays.
The licence will also require NATS to consult its customers on an ongoing basis—I shall come back to that issue when I respond to Amendment No. 34—and to establish performance measures, performance indicators, and service standards which the CAA will be able to enforce through the licence. These measures, indicators and standards will be reviewed annually and will be subject to the approval of the CAA. If this approval is withheld or withdrawn, the licensee would be in breach of the licence and open to enforcement action by the CAA and ultimately in the courts by third parties.
The measures and service standards will be set with regard to the importance that NATS' customers attach to this issue. But they must also reflect the relatively immature nature of the systems for attributing delay to one party or another. That is why I referred to Railtrack and the train operating companies. Crucially, the standards can be set at a level which will provide an incentive to NATS to perform well, but not so high that there would be a risk of their creating, or of being seen to create, pressure to cut corners.
For a number of reasons I am nervous of introducing compensation and indemnities, as Amendment No. 31 would have us do. First, they would create an unbalanced requirement on NATS. NATS will be under an obligation, as it is now, to accept and handle all flights entering UK airspace. As a matter of preserving safety, it cannot refuse. But if it must accept the business, and on occasion can do so safely only by imposing delays. Therefore, it is
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unreasonable to impose a direct penalty for each and every delay, which this amendment would do. Pressure on the charge cap, which is pressure to reduce the scale of delays overall, is more appropriate. Secondly, we are still developing ways to attribute delays with precision to one cause or another. We need greater refinement in that process before it would be reasonable to apply direct penalties. Thirdly, this is a safety service, and pressure to cut out individual delays—pressure backed by the possibility of considerable financial jeopardy—could provide pressure to cut corners, even in an outfit as safety conscious as NATS. I am not arguing that NAT'S should not be liable for any failures, but I believe that what I have outlined will encourage NATS to improve its performance without encouraging it to cut corners.
I turn now to Amendment No. 34. I fully support what the amendment is seeking to achieve. NAT'S must consult its customers, and it must do so properly through informed consultation with a view to reaching consensus. I listened very carefully to what the noble Lord, Lord Brabazon, said about what has happened in the past and his allegation that airlines have never been consulted. Without making any judgment on what happened in the past, perhaps I may say that an integral part of the PPP structure will be a stakeholder council, which will bring together all the stakeholders in the partnership, including airline and passenger representatives, in a forum for full and open consultation on the policy and strategies of the company in addressing the issues and challenges it faces. Meeting demand for air traffic control capacity will be at the top of that agenda.
The noble Lord, Lord Brabazon, cast doubt on whether that was an adequate solution. He said that NATS would still have sole responsibility. The operating licence—a draft of which is in the Library of your Lordships' House—includes a condition requiring the licensee to prepare a capacity an d investment plan which takes into account the views of users. That is in condition 10 of the draft licence. Condition 16 requires the licensee to draw up and obtain the CAA's approval of a code of practice setting out how the licensee is to consult its customers and handle complaints.
I believe that the thrust of both these amendments is provided for already in the Bill and that it is unnecessary to have them on the face of the legislation.
Lord Berkeley: Before my noble friend sits down, both he and the noble Lord, Lord Brabazon, mentioned Railtrack. My perception of Railtrack's compensation regime is that it works very well. The train operators and Railtrack have a system of compensating each other if there is a delay. Railtrack is penalised by the regulator if it causes too many delays. If one train operator causes another to be delayed, there is a kind of clearing house.
Railtrack has responsibility for safety in the same manner as NATS. Whereas I believe that Amendment No. 31 goes much too far, I wonder whether there is a case for looking at some kind of system for compensating those airlines which are delayed by what

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I shall call "equipment failure"—we have had a few of those recently—I am referring to the inability of NATS to provide for the capacity to which it is contracted. That is a much narrower definition than that proposed in Amendment No. 31. On the basis of how the matter works on the railways, would the Minister consider it worth looking at in a little more detail?
Lord McIntosh of Haringey: I take responsibility for referring to Railtrack. I do not believe that the noble Lord, Lord Brabazon, did, which was very wise on his part. I was interested to hear what the noble Lord, Lord Berkeley, said about Railtrack and our ability to allocate responsibility for delays. The system has been operating for some years, but we are talking here about something which we have to introduce. Our argument is that the system has to settle down.
I suggest to the noble Lord, Lord Berkeley, that there is a fundamental difference in the relationship between Railtrack and the train operating companies from that between NATS and the airlines. The difference is that NATS has to accept any traffic that comes into United Kingdom airspace even if it cannot be anticipated. Therefore, in order to preserve the paramount requirement for safety, it has to accept additional traffic which may cause delays. I do not believe that that is the case with Railtrack because my understanding is that it is in a position to agree with the train operating companies what traffic there should be on the rails.
Lord Berkeley: My noble friend is mainly right. I was not suggesting that NATS should somehow have to compensate airlines when they are delayed by too much traffic. However, I suggested that it might be useful if it had an incentive not to have a major computer failure, such that it reduced normal capacity by 100 per cent or 50 per cent because of its own equipment failure.
Lord McIntosh of Haringey: From such a transport expert as my noble friend Lord Berkeley, "mainly right" will do quite well for me. The issues that he has raised can be discussed by the stakeholder council.
Lord Brabazon of Tara: I am grateful for the Minister's response. I am also grateful for the intervention of the noble Lord, Lord Berkeley. The Minister clearly did not listen to my speech as closely as he does normally. I mentioned Railtrack, which was very foolish, as the noble Lord said. However, there is a comparison to be made because both are providers of infrastructure: in the one case, aircraft use it, and, in the other, trains. I am encouraged by the Minister's response to my Amendment No. 34 on the subject of consultation. I hope that that is right and that the stakeholder council will be a live issue and not just a waste of time, if I may put it that way.
Nothing in my amendments is intended in any way to affect the overriding requirement to put safety as the top priority. I take the noble Lord's point that NATS
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is liable to receive air traffic coming into United Kingdom airspace. But there are problems where it could be accused of not having maintained its equipment sufficiently well and where it could be responsible for causing delays through its own fault and not through over-demand, if I may put it that way.
Lord McIntosh of Haringey: Surely, those would be delays which would apply to a number of airlines over a period of time. They are the overall delays to which I referred and which can be dealt with by the conditions in the licence. The amendment proposes compensation for individual delays, which is a different thing.
Lord Brabazon of Tara: I was going to say that I was also pleased with what the noble Lord said about the draft licence conditions. I shall read with care what the noble Lord said. I may wish to come back to this matter at the next stage. I hope that when everything goes through it all works well. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 32 and 33 not moved.]
Clause 7 agreed to.
Clause 8 [Duties of licence holders]:
[Amendments Nos. 34 and 35 not moved.]
Clause 8 agreed to.
Clause 9 agreed to.
Clause 10 [Breach of duties or conditions]:
[Amendment No. 36 not moved.]
Clause 10 agreed to.
Clause 11 [Modification by agreement]:
[Amendment No. 37 not moved.]
8.30 p.m.
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 38:
Page 7, line 26, leave out subsection (4).
The noble Lord said: In moving Amendment No. 38 I shall speak also to Amendments Nos. 40 to 47, 49 and 50.
This group of amendments deals with modification of licences. Subsection (4) of Clause 11 enables the Secretary of State to overrule a decision of the CAA to modify a licence with the consent of the licence holder. Amendment No. 38 seeks to remove that power. The CAA has been entrusted with the power to modify licences and should be left to get on with it without interference from the Secretary of State. The CAA is best placed to judge properly the matters in issue without being swayed by what may be irrelevant political considerations.
The interests of the public are already protected in law by the requirement that the CAA complies with its duties as set out in Clause 2. Compliance with a direction of the Secretary of State may put the CAA in conflict with its duties as it sees them under Clause 2, which would be a completely untenable position for the CAA. If the Secretary of State has good reason to

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resist the modification, he can make representations which the CAA is obliged to consider under subsection (2)(d) and to which the CAA will no doubt give considerable weight. This is sufficient protection for the Secretary of State without his having to take this arbitrary and unwarranted power.
Turning to Amendment No. 40, Clause 12 enables the CAA to refer anti-competitive behaviour to the Competition Commission if it is damaging to the public interest. Subsection (5) gives the Secretary of State power to put a stop to such reference. This amendment seeks to remove this power from the Secretary of State and to leave such decisions where they belong, in the hands of the CAA. The CAA is best placed to judge whether anti-competitive behaviour damaging to the public interest may be occurring without being swayed by political considerations. There is no legitimate reason to give the Secretary of State power to override such a decision by the CAA. The exercise of such power by the Secretary of State would not only substitute his judgment for that of the CAA but also for that of the Competition Commission, which would be deprived of the opportunity to rule on any issue raised by the CAA.
Genuine competition has a big part to play in delivering cost-effective quality services and there should be no obstacles to ensuring that it operates fully. It would be difficult to find anyone other than the Secretary of State who did not believe that the CAA and the Competition Commission were better able than the Secretary of State to decide such issues, especially when the Secretary of State may not always be in favour of the concept of competition.
Turning briefly to Amendments Nos. 41 and 43, subsection (3)(d) of Clause 14 obliges the CAA to take into account representations made in response to any notice of proposed modifications issued under this subsection. However, such notice follows the relevant report by the Competition Commission, which the CAA is obliged to publish. This amendment seeks to oblige the CAA to take into account any representations made in response to the published report. The purpose of publishing the report under Clause 12 is presumably to enable interested parties to make representations. Any representations made in response to the report should be considered as well as the suggested modifications.
Turning to Amendment No. 42, subsection (2) gives the CAA the right to suggest modifications from those proposed by the Competition Commission following a reference. The amendment seeks to require the CAA to explain why it has proposed changes. If the CAA disagrees with the Competition Commission, it should be obliged to say why in order to ensure that consultation is indeed a meaningful exercise. That is the purpose of that amendment.
Clause 14(5)(b) obliges the CAA to forward representations received to the Competition Commission. There is, however, no obligation on the Competition Commission to take account of such
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representations, as it plainly should. Amendment No. 44 seeks to place a positive obligation on the competition commission to do so.
Subsection (2) of Clause 16 gives the Competition Commission the right to suggest different modifications from those originally proposed by the Competition Commission following a reference. Amendment No. 45 requires the Competition Commission to explain why it has proposed changes. If the Competition Commission has changed its mind as regards modifications, it should be obliged to say why in order to ensure that consultation again is a meaningful exercise.
Amendments Nos. 46 and 47 concern Clause 20, which gives the CAA power to require a licence holder to do just about anything in order to secure compliance with the duty under Clause 8 or a licence condition. It is limited only by what it thinks is needed to secure compliance. The amendments seek to replace the subjective test of what "it thinks is" needed with the objective test of what is "reasonably" needed. The power invested in the CAA is wide-ranging and comprehensive and it should be reasonable—and seen to be reasonable—in exercising it.
Turning to Amendment No. 49, Clause 21(3) of the Bill provides the circumstances in which the CAA must not make a final order or confirm a provisional order against a licence holder. In brief, those circumstances are that the licence holder has taken the steps he has been told to by the CAA to remedy a breach of his licence; the breach in question is trivial; the breach will not affect other interested parties, most importantly the travelling public; or the Secretary of State has applied for an air traffic administration order in relation to the licence holder.
Clause 21(2) gives the CAA discretion to determine whether any of these circumstances exists. However, it then goes on to state that even if it determines that any of the circumstances exist, it may nevertheless go ahead and make a final order or confirm a provisional order. With the exception of Clause 21(3)(d), which deals with the air traffic administration order, this looks a little curious. Why should the CAA be able to make a final order or confirm a provisional order against the licence holder if, for example, it has already determined that the licence holder is doing all he can to remedy a breach? While we can see the arguments to allow the CAA to do this, we feel it would give reassurance to licence holders if it were made clear that the CAA's ability to make a final order or confirm a provisional order, notwithstanding the existence of the conditions in Clause 21(3), was subject to the CAA's overriding policy objectives set out in Clause 2. That is what the amendment seeks to do.
Finally, Amendment No. 50 deals with Clause 22. Subsection (4) provides that the CAA must consider any representations made by a licence holder notified of any modifications to be made to an order. Subsection (5) exempts the CAA from that obligation where the modifications are trivial. This amendment seeks to remove that exemption. What appears trivial to the CAA may not look so trivial to a licence holder.

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If it really is trivial, the licence holder is unlikely to make representations and nothing is lost. But we believe that the licence holder needs the protection of being able to make representations if it considers the matter is not as trivial as the CAA thinks. Members of the Committee will be pleased to know that that was the final amendment in this group. I admit that they are technical amendments. I look forward to the Minister explaining the Government's thinking on this issue. I beg to move.
Lord McIntosh of Haringey: If ever I have heard an invitation for a long speech in response, that is it. I shall do my best to answer all the points raised by the noble Lord, but I shall do it as quickly as I can.
Amendments Nos. 38 to 45 address the process by which licences are modified. The modification process, and the checks and balances which underpin it, is long established in other utility legislation, although the Government are seeking to introduce some further safeguards. Amendments Nos. 38 and 40 would remove one of those safeguards: the Secretary of State's powers to veto modifications which have been agreed between the regulator and the licensee, and a reference to the Competition Commission.
The power of veto is no more than a backstop provision. It dates back to the dawn of utility legislation in the 1980s—Sections 12(5) and 13(5) of the Telecommunications Act 1984; Sections 11(4) and 12(5) of the Electricity Act 1989—and, as far as I am aware, it has never been used. But it is important because it protects against the possibility—albeit a remote one—of there being a sound public policy reason, which would almost certainly have to be stated and justified, why an agreed modification, or a reference to the commission—Amendment No. 40—should not go ahead. For example, the Secretary of State could use the power under Clause 11(4) if he thought that a modification agreed between the regulator and the licensee ran contrary to the interest of NATS' customers.
As far as concerns reference to the Competition Commission—Amendment No. 40—the situation might arise where the CAA was contemplating asking the Competition Commission to make a public interest finding in an area which also engaged the Secretary of State's wider public interest. As I say, that provision has appeared in utility legislation for most of the past 20 years and, as far as I am aware, the power has never been used. So we are not talking about the Secretary of State routinely thwarting the proper process of licence modification. But the Secretary of State's power of veto is a safety net, and the Government believe that it should stay in place.
Amendments Nos. 41 to 45 seek to introduce greater transparency into the licence modification process. But in fact the requirements they would introduce are already in place. The process is somewhat convoluted, but it is structured so as to ensure that at any point interested parties are made aware not only of what is going on, but why. For example, Clause 14 requires the CAA to suggest to the commission such modifications
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as it thinks are needed to remedy the adverse effects identified in the report. Before doing so, however, it must publish a notice setting out its proposals and its reasons for making them. Clause 15(5)(c) requires the commission to give its reasons for rejecting the CAA's proposals. Clause 16(5)(a) requires the commission to give reasons behind its own proposed modifications.
The common thread running through the whole modification process is that at each stage any person likely to be affected is kept informed by notice, is told what is being proposed, the effect of the proposals and why they are being made, and is able to make representations to the CAA or the commission, as the case may be. I believe that that answers the noble Lord's point. I think that would obviate the need to set out any differences, as that would be clear simply from comparing the notices.
I turn to Amendments Nos. 46 to 50. These all concern the enforcement process. Amendments Nos. 46 and 47 import the concept of reasonableness into the making of enforcement orders. I am certainly all in favour of reasonableness: administrative law is based on that very concept. When the CAA makes an enforcement order, Clause 20 requires that order to contain the provisions the CAA thinks are needed to secure the licence holder's compliance with the duty or condition which is being contravened. These orders are open to challenge by the licensee—which is right and proper—and if an order were challenged, then the court would consider the reasonableness not only of the order being made at all but also of its content. I believe that that is better than introducing reasonableness onto the face of the Bill as Amendments Nos. 46 and 47 seek to do.
The facts are these. The CAA will have to make a judgment as to what needs to go into an enforcement order. It will make that judgment in the knowledge that it may be challenged. If it were challenged, the court would determine whether it was reasonable. The effect of all this is to encourage, if not require, the CAA to come to a rational—or even reasonable—conclusion about the matter. It is not necessary to say on the face of the Bill that it must act reasonably, because the law assumes that anyone discharging a function under statute is under a duty to act reasonably. The courts will tolerate nothing less.
I do not believe that Amendment No. 49 is necessary. The duties laid on the CAA by Clause 2 are already explicitly applied to the exercise of all the CAA's functions in Chapter I of Part I of the Bill. Clause 2 opens with the very clear statement that:
"The CAA must exercise its functions under this Chapter in the manner it thinks best calculated … to",
and so on. Clause 21 and the enforcement provisions appear in Chapter I of Part I, and the Clause 2 duty therefore applies.
I believe that Amendment No. 50 over-eggs the pudding. The enforcement procedure must be fair, but Clause 22 requires the CAA to go through a number of hoops in order to satisfy itself that there has been a breach of a Clause 8 duty or a licence condition. The

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main purpose of these hoops—a very right and proper one—is to ensure that all interested parties are made properly aware of the enforcement process.
If the CAA proposes to modify an enforcement order, it must first seek the licensee's consent to its proposed modifications, whether or not those modifications are trivial. The noble Lord, Lord Brabazon, made a point about the word "trivial". So the licensee will in all cases be made aware of the modifications that the CAA is proposing to make. If the modifications are trivial, the CAA does not need the licensee's consent and need not give the licensee further opportunity to make representations. We need to keep a sense of proportion here.
The earlier discussions between the CAA and the licensee about the order might have shown that it contained a minor error of fact, or an incorrect date, or just typing errors, and the modification might be intended to do no more than correct them. If the licensee objects to some of the modifications and does not consider them to be trivial, he can say so to the CAA. He could challenge the validity of the order under Clause 23(1). The noble Lord, Lord Brabazon, said that the licensee needs protection. I do not think that the licensee is in a weak position here.
I know that hypothetical examples are dangerous, but let us suppose that the CAA considered that a service provided by NATS under the authority of its licence had become contestable and therefore wished to remove it from the licence. NATS—for understandable reasons—did not wish to relinquish that service and resisted the proposed modification. If that were to happen, the CAA would wish to refer the matter to the Competition Commission for a public interest judgment. In such a case, one might expect the commission to come up with a ruling broadly supportive of the CAA. But what if the service was one where effective integration with military air traffic control was crucial and the Secretary of State believed that that integration would be best preserved by leaving the service with NATS or with it continuing to be provided under the authority of a licence? In these circumstances, the Secretary of State might think it best to veto the reference at the outset, and the Committee might consider it reasonable on national security grounds for him to do so. Perhaps that example is far-fetched. That is why I said that these powers are unlikely to be used. But that combination of circumstances—or something similar—might just happen. That is why the safety net of Clause 12(5) needs to be left in place.
I believe that we can rely on the CAA to be evenhanded and to engage in a rational dialogue with the licensee. It would be disproportionate to require the CAA to take representations from the licensee on trivial modifications to a proposed order. The licensee's rights under Clause 23 will ensure that the CAA does not abuse the position.
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I am sorry to have taken so long. I probably took just as long as the noble Lord, Lord Brabazon of Tara. I hope that I have answered the points raised by these amendments.
Lord Brabazon of Tara: I am most grateful to the Minister for that detailed reply. Somewhere in those remarks he said that the structure of this was somewhat convoluted. For that reason, I feel no shame in having tabled the amendments in order to probe a little more deeply into how the whole process is going to work.
I am also grateful to the noble Lord for explaining the history of the earlier utilities legislation and the fact that provisions were in place but in the event had never been used. It is helpful to know that. As the noble Lord said, in any case this could be subject to legal challenge if people do not think that they are being treated fairly.
I shall need to read carefully the noble Lord's detailed responses to individual amendments. However, we have had a most helpful debate on the subject and we now have a far clearer picture of how this might work. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 39 not moved.]
Clause 11 agreed to.
Clause 12 [References to Competition Commission]:
[Amendment No. 40 not moved.]
Clause 12 agreed to.
Clause 13 agreed to.
Clause 14 [Modification following report]:
[Amendments Nos. 41 to 43 not moved.]
Clause 14 agreed to.
Clause 15 [Commission's power to give direction]:
[Amendment No. 44 not moved.]
Clause 15 agreed to.
Clause 16 [Position where Commission gives direction]:
[Amendment No. 45 not moved.]
Clause 16 agreed to.
Clauses 17 to 19 agreed to.
Clause 20 [Orders for securing compliance]:
[Amendments Nos. 46 to 48 not moved.]
Clause 20 agreed to.
Clause 21 [Exceptions]:
[Amendment No. 49 not moved.]
Clause 21 agreed to.
Clause 22 [Procedural requirements]:
[Amendments Nos. 50 and 51 not moved.]
Clause 22 agreed to.
Clauses 23 to 26 agreed to.
Clause 27 [Duty to make order]:
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 52:
Page 20, line 4, leave out ("Secretary of State and the").
The noble Lord said: In moving Amendment No. 52 I should like to speak briefly to Amendment No. 53. We have reached the subject of the administrator.
Amendment No. 52 seeks to leave out the words "Secretary of State". As drafted, the clause allows the Secretary of State to make his choice of an administrator rather than leave it to the court. The amendment would restrict such a power to the CAA. Perhaps the Minister could explain why he feels that it is necessary for the Secretary of State to be in a position to appoint the administrator and why the CAA, which is, after all, the regulator in respect of licence holders, should not be allowed to exercise its powers without interference from the Secretary of State.
Amendment No. 53 seeks to ensure that any person managing the affairs, business and property of a licensee during the currency of an air traffic administration order is a competent person. The making of an air traffic administration order is a serious step and one which I hope never occurs. However, if one looks at the circumstances under which a court would have to make such an order under Clause 28, the licence company in question would either be in extreme financial difficulties or would have failed to carry out a Clause 8 duty. The duties under that clause include, of course, securing a safe air traffic control system.
The amendment is designed to ensure that the choice of person made to manage such a company's business and property would not be the decision of the Secretary of State and the CAA alone but that the court would be given power to satisfy itself of the suitability of the person proposed. In a case of insolvency, the most obvious choice would be an insolvency practitioner. However, it is questionable whether any insolvency practitioner would have the necessary day-to-day experience of running part of an air traffic system. Equally, a person with such experience might not be the most appropriate person to carry on the financial aspects of a licensed company's business. A combination of persons might be required.
The amendment would allow the court to be the ultimate safeguard of the public's interests in this area and ensure that the executive had considered the best solution in all the circumstances. I beg to move.
Lord McIntosh of Haringey: The noble Lord, Lord Brabazon, is of course right to say that these clauses deal with extreme circumstances. I join with the noble Lord in saying that I hope they never occur. Here the Bill addresses what would happen after the hearing of a winding-up petition and an air traffic administrator needed to be appointed.
Amendment No. 52 seeks to remove the right of the Secretary of State to nominate an air traffic administrator and leave the matter entirely to the CAA. It is inconceivable, if we reached such a dreadful point where it became necessary to make an
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administration order, that the Secretary of State and the CAA would not be involved in detailed discussions.
Part of those discussions would of course include who would be best suited to take over the running of NATS for the duration of the order. Both the CAA and the Secretary of State would have a contribution to make to that decision. For that reason, the clause is drafted to provide for the nomination to be made jointly. It recognises and reflects the process of consultation that the Secretary of State and the CAA will inevitably go through in those circumstances.
These would be matters of very great public concern. I cannot imagine a Secretary of State appearing before Parliament and saying, "It's got nothing to do with me, guy". Clearly the Secretary of State would have a legitimate interest in the identity of the administrator. The administrator would effectively stand in the shoes of the licence holder's management; it is analogous to the granting of a licence. The Secretary of State is the person to grant licences, after consultation with the CAA, or who consents or gives an authority to the CAA to grant licences. It therefore makes sense that he should be involved in the decision to nominate the administrator.
I was interested to listen to the arguments advanced by the noble Lord, Lord Brabazon, in support of Amendment No. 53. One of the reasons why the Bill provides for the Secretary of State and the CAA to nominate the administrator is that it is essential for a suitable person to be identified and appointed. I take entirely the point made by the noble Lord about the need to appoint someone who would be competent to run the business rather than being necessarily an insolvency practitioner. I shall quote what the noble Lord said in that regard when we reach the later stages of the Insolvency Bill. His colleagues have been arguing the opposite case.
Clearly, the nominee must be a person that the CAA and the Secretary of State are confident is perfectly capable of discharging the air traffic administration order. Frankly, the court would turn back such a challenge. It would say, "It is up to you to find the right person". This is not a matter for the court. It has no capabilities as regards undertaking the vetting process implied by the amendment.
Baroness Thomas of Walliswood: Before the noble Lord, Lord Brabazon, replies to the remarks made by the Minister, can he tell me whether he will take on board the suggestion made by the noble Lord, Lord Brabazon, that two people might need to be appointed? I understand that a person with specialist skills would be needed to run such a particular business. However, the business of insolvency is also

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complicated. The Secretary of State might find it difficult to locate all that expertise combined in one person.
Lord McIntosh of Haringey: I should have thought that it would be not only two people but that it could very well be a team. Under certain circumstances, it could even be a company.
Lord Brabazon of Tara: I am grateful for the Minister's reply and also for the intervention of the noble Baroness, Lady Thomas. Having listened to the Minister's remarks, I presume therefore that the word "person" used in the phraseology of the Bill denotes more than one person.
Lord McIntosh of Haringey: A "person" used in this sense is not restricted to a natural person.
Lord Brabazon of Tara: I shall take the word of the noble Lord on that point. However, I am now a little worried about the amendments. The Minister has threatened to quote me in other proceedings that are due to come to your Lordships' House. I shall have to ensure that I am not in the House on that day. Nevertheless, the exchange has been helpful. I hope that such an event never takes place. I think it unlikely, given the safeguards that will be in place. However, in case it does, it is useful to have clarification on what might happen. I beg leave to withdraw the amendment.
Amendment, by leave withdrawn.
Amendment No. 53 not moved.]
Clause 27 agreed to.
Clauses 28 to 30 agreed to.
[Amendment No. 54 not moved.]
Schedules 1 and 2 agreed to.
Clauses 31 to 33 agreed to.
Schedule 3 agreed to.
[Amendment No. 55 not moved.]
Clause 34 agreed to.
Clause 35 [Register]:
[Amendment No. 56 not moved.]
Clause 35 agreed to.
Clause 36 agreed to.
Schedule 4 agreed to.
Clause 37 agreed to.
Schedule 5 agreed to.
Clause 38 [Directions in interests of national security etc.]:
[Amendments Nos. 57 to 60 not moved.]
Clause 38 agreed to.
Clause 39 [Directions relating to the environment]:
[Amendments Nos. 61 to 65 not moved.]
Clause 39 agreed to.
Clause 40 agreed to.
Clause 41 [Meaning of transfer scheme]:
[Amendment No. 66 not moved.]
Clause 41 agreed to
Clause 42 [Transfer schemes: supplementary]:
9 p.m.
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 67:
Page 28, line 12, at end insert ("provided that the rights of arty third party are not adversely affected by any such transfer or assignment or such third party consents to the transfer or assignment").
The noble Lord said: In moving this amendment, perhaps I may speak also to Amendments Nos. 89 and 92. The amendments deal with transfers.
Clause 42(1)(a) creates a power to transfer anything, including a liability, which would not otherwise be capable of being transferred or assigned. The amendment requires the consent of any third party adversely affected by such transfer.
A third party may have entered into a contract with the CAA as an arm of government in good faith, expecting and entitled to expect that contract to remain with the CAA unless consent was given to a transfer. A contract with a private/public partnership company might have been made on different terms.
A statute should not be used to override any private law right of a third party. It is not good enough to have the Government or the CAA dictate how such rights are to be dealt with; third parties should not be forced to relinquish any rights against their wishes. That is t he purpose of Amendment No. 67.
Amendment No. 89 relates to Clause 53. It is right that Parliament should be informed of any default under a guarantee given by the Treasury or the Secretary of State, but information alone is not sufficient. This amendment requires the reasons for the default and the steps to be taken to recover the sums outstanding to be included in that statement.
Government carry the responsibility for giving the guarantee in the first place. Proper risk assessment and monitoring of the financial position of the guarantor should ensure that a default is avoided. If government allow a default to occur, none the less it is not good enough for Parliament just to be told of it; Parliament needs to know what government will be doing to rectify the situation.
The last amendment in this group, Amendment No. 92, relates to Clause 57. It seeks to delete subsection (4). The subsection enables the Secretary of State to give a direction to the CAA in connection with a transfer scheme even if complying with that direction would put the CAA in conflict with its duties under the Act. This amendment removes the power of the Secretary of State in those circumstances.
The duties of the CAA under the Act, especially in Clause 2, provide the fundamental framework within which it must act. It should not be possible for the Secretary of State to override it on the arbitrary basis allowed by the provision in subsection (4). The duties of the CAA anyway reflect the duties of the Secretary

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of State as set out in Clause 1 and the Secretary of State should not find himself in the position of being able, within his own powers, to give a direction which overrides the duties of the CAA. If the clause is designed to meet a specific problem, that should be spelt out and specific provision should be made in the Bill. I beg to move.
Lord McIntosh of Haringey: The admirable aim of Amendment No. 67 is to ensure that transfer schemes do not ignore third party rights. The transfer process is intended to ensure that transfers of property, rights and liabilities required to achieve the necessary reorganisation can occur within the desired timetable and without the delay that transfers under private law may entail, particularly when third parties are involved.
If we were to adopt the amendment, any third party which perceived, rightly or wrongly, its rights to be threatened would be able to hold the Government and NATS to ransom. The situation could jeopardise the PPP timetable and so prejudice the delivery of major projects such as Swanwick and the NSC.
However, that does not mean that the position of third parties has been forgotten. Protection has been provided in paragraphs 19 to 23 of Schedule 6. These paragraphs contain safeguards if there is a reduction in value of any property or right of a third party arising as a consequence of a transfer scheme. There is provision for the payment of compensation to an aggrieved party, and for the appointment of an arbitrator if there is a dispute about how much compensation is payable. A third party has protection—in the context of court proceedings—where the issues in those proceedings depend on the correct identification or definition of any property rights or liabilities which are the subject of a transfer scheme. Where an agreement or instrument made under the schedule might operate unfairly, the Secretary of State has power to intervene. I hope that the noble Lord, Lord Brabazon, agrees that the position of third parties is adequately safeguarded in the Bill.
Amendment No. 89 would enshrine within legislation the information which should be included in a statement to be laid before each House of Parliament by the Secretary of State or the Treasury, as appropriate, in the event that repayment of a sum in fulfilment of a guarantee previously given was not made. I appreciate the desire to make special legislative provision for these details to be included, but I do not believe that it is necessary to make these changes. There are two reasons for the calling of a guarantee: the body in question may be either unwilling or unable to discharge its obligations. In either case the Government expect to be reimbursed in accordance with arrangements made under subsection (8) of this clause.
The amendment seeks to require the Government to lay a statement before the House citing the reasons for the calling of the guarantee. The problem is that as guarantor the Government are not necessarily in a
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position either to know the reasons for the default or, if they do know, for reasons of commercial confidentiality, to disclose them. The only information that the Government are sure to have is the fact that the guarantee is being called and the amount being claimed. It is not possible for the Government to state to Parliament the reasons for the default.
Amendment No. 92 proposes the deletion of Clause 57(4). This subsection seeks to ensure that the CAA has the power to comply with a direction issued to it to release NATS from its indebtedness. In complying with that direction, the CAA is not to be regarded as having failed to comply with its other duties; that is, the general obligation under Clause 2. The subsection is purely technical and is designed to prevent frivolous or vexatious claims that may be made that the CAA is failing in its duties by complying with the direction. There is nothing in it which in any way overrides or prejudices the CAA's responsibilities for safety and other matters. I hope that the noble Lord, Lord Brabazon, will not pursue these amendments.
Lord Brabazon of Tara: I hoped that it was clear that these amendments, like others, are probing amendments to flesh out in a little more detail how the Government might view matters in the event of a transfer. I am grateful for the response of the Minister, which I shall read with great care. In the mean time, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 42 agreed to.
[Amendments Nos. 68 and 69 not moved.]
Clause 43 agreed to.
Clause 44 [Effect of scheme made by CAA]:
[Amendments Nos. 70 to 74 not moved.]
Clause 44 agreed to.
Clause 45 [Transfer schemes made by Secretary of State]:
[Amendments Nos. 75 and 76 not moved.]
Clause 45 agreed to.
Clause 46 agreed to.
Clause 47 [Accounting provisions]:
[Amendment No. 77 not moved.]
Clause 47 agreed to.
Clause 48 [Accounting provisions: interpretation]:
[Amendment No. 78 not moved.]
Clause 48 agreed to.
Clauses 49 and 50 agreed to.
Clause 51 [Crown shareholding]:
[Amendments Nos. 79 to 83 not moved.]
Clause 51 agreed to.
[Amendment No. 84 not moved.]
Lord Brett Lord Brett moved Amendment No. 85:
Before Clause 52, insert the following new clause—
VOTING RIGHTS OF CROWN SHAREHOLDER, EMPLOYEE PARTICIPATION, ETC
(" .—(1) This section applies if any property, rights or liabilities are transferred under a transfer scheme to a transferee which at the time of the transfer is—

(a) a company which is wholly owned by the Crown;

(b) a company which is wholly owned by the CAA;

(c) a company which is a wholly owned subsidiary of a company falling within paragraph (a) or (b).

(2) The Secretary of State may by order designate such a transferee for the purposes of this section.
(3) The Secretary of State must ensure that, in relation to members' resolutions of the designated company, the proportion of votes exercised by the Crown shareholder, as a proportion of the total votes available to all shareholders, shall be in direct proportion to the proportion of shares in issue held by the Crown shareholder.
(4) The Secretary of State must ensure that the Crown shareholder must appoint a number of Directors to the Board of the designated Company, so that the proportion of its appointees on the Board is equal to the proportion of shares in issue held by the Crown shareholder.
(5) The Secretary of State must ensure that at least 5% of the designated company's issued ordinary share capital shall be held by an Employee Share Trust on behalf of employees.
(6) The Secretary of State must ensure that a representative of the Employee Share Trust is appointed to the Board of Directors of the designated company.").
The noble Lord said: I rise to move Amendment No. 85 which deals with both Crown shareholder responsibility and strength and board representation by employees. It was noteworthy that in winding up at Second Reading my noble friend Lord Whitty paid tribute to the staff of NATS. He said that the success of a NATS PPP depended on staff commitment and involvement. Earlier I spoke in favour of the trust model. However, if there is to be a PPP on the basis of the model described today by Ministers, it is better to have an understanding of the role of the government shareholder nominees and possibly representation by the staff.
In the proposal for the PPP, the Government have stated that 46 per cent of the shares are to be held by a strategic partner in the private sector; 49 per cent will be retained by the Government; and 5 per cent will be made available to employees. The precise method of the distribution of the latter has not yet been agreed. It is clear from the draft strategic partnership agreement that the Government will not vote their 49 per cent share and that operational control will pass to the strategic partner who will appoint all executive directors. If this is to be a true partnership between the public and private sectors, I believe that it must be different from a normal commercial organisation. The partnership must be embedded in a way that clearly indicates that that is the case.
If we have to have this partnership, the Government should not be voting at less than their voting strength—in other words, having one director less than that provided by the strategic partner. We are also concerned that the Bill, as drafted, allows the government interest to be diluted down to 25 per cent
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without any reference back to Parliament. That also underlines the need for the Government to vote their full proportion of shares.
Therefore the amendment proposes that no restriction shall be placed on the voting rights of shares held by the Crown in any PPP; and that voting rights and board representation should be in proportion to shares held. It also ensures that the Crown will appoint as many shareholders to its board as is commensurate with its shareholding. We believe that that is true partnership.
On the employee side, there is already a general understanding that the employees' shares will be gifted and available for purchase and that the 5 per cent collectively will be held in an employee share trust (EST) on behalf of the employees.
We have proposed, so far without success, that a representative of the board of trustees should have a seat on the board of NATS. That would reassure employees that their interests and wider safety concerns would be given serious consideration by the board. We also believe in participation by employees, albeit indirectly. We do not propose that a current employee should be a board member but rather that, in conjunction with government, there should be someone in whom the staff could have confidence. We believe that that is in keeping with the Government's policy on partnership at work.
In tabling an amendment which stipulates that the employees' share should be held in a trust for employees and that a representative of the trust board should have a place on the board of directors we hope to regain the confidence of employees. It has been somewhat undermined by the lack of enthusiasm for the current PPP and preference for a trust model. The Minister's refusal to accept a representative of the staff interest on the board involves the normal commercial problem that on a 10 per cent shareholding one does not find oneself offered a seat on the board. This is not a normal commercial company. We think that it would cement the partnership if at this stage the Government proposed that, despite the shareholding by staff being only 5 per cent, there would be a nominee of the staff on the board. It would be understandable to a strategic partner. It would in no way undermine the Government's responsibility or interests. But it would cement the idea of partnership and that this PPP was different from any privatisation that has gone before. I beg to move.
9.15 p.m.
Lord Lea of Crondall: It is a difficulty that some of these matters are not on the face of the Bill. However, having considered the strategic partnership agreement placed in the Library, it is worth quoting a couple of points in order to achieve some perspective on the subject. That agreement states:
"The private sector shareholders shall use all reasonable endeavours to ensure that the Directors appointed pursuant to clause 7 constitute a majority of the Directors at all times. If, notwithstanding such reasonable endeavours, such directors do not constitute a majority of the directors at any Lime, the Private Sector Shareholders shall, as soon as reasonably practicable, appoint such number as is necessary to restore that majority".

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This is a somewhat strange PPP. My noble friend Lord Brett referred to the figures. The Government, with a 49 per cent share, will not be voting their 49 per cent share. Operational control will pass to the strategic partner, which has 46 per cent. This should be a majority of the directors at all times.
The second leg of the amendment gives constructive thought to the third element of the equation; namely, the employees whose interest is self-evidently not necessarily identical with that of the private shareholders. The formula for shareholders is set out in a somewhat singular way, with a 10 per cent threshold before there is any entitlement to appoint a director. The strategic partner with more than 10 per cent will appoint the chairman as long as there is no blackball from the Crown shareholder.
We begin with the position of the Government selling 46 per cent and retaining 49 per cent. The amendment states that no restriction should be placed on the voting rights of shares held by the Crown in this PPP and that both voting rights and board representation should be in proportion to the shares held. It would also ensure that the Crown will appoint as many directors to the board as is commensurate with its shareholding.
As regards the specific employee representation aspect, mentioned by my noble friend, there is an understanding that the employees' shares will be gifted and held in trust on behalf of the employees. Therefore, we propose that the representative of the board of trustees should have a seat on the board of NATS. We believe that that would assure employees that their interests were being taken into consideration together with the wider safety concerns mentioned in an earlier debate.
Perhaps I may conclude on a broader consideration. My noble friend Lord Faulkner of Worcester made what may well be an accurate prediction about the shape of things to come in the single European sky. In the next two or three years there may be massive structural changes in European air traffic control. But, surely, the moral of that is that we must do all we can to reassure all the stakeholders, not least the air traffic controllers, that we can make a soft landing in this brave new world.
If 49 centres in Europe are to be reduced to about six, as my noble friend the Minister speculated in an important intervention, imperialist or otherwise—and there is nothing wrong with a bit of imperialism as it solves the European problem—it will be extremely tricky to sustain trust and confidence.
I accept the prima facie case for structural change in Europe—indeed, I have tabled a Question on that issue which will be debated on 18th July—but we must set out the fences systematically. We must not try to jump the third fence before we have jumped the first because that will only confuse the horse! An important new agenda is emerging. I hope that the Minister will accept that this is a challenging period for all concerned not only in terms of board structure but of the stakeholder council and collective negotiation with
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the trade unions at every level, including the social dialogue associated with the high-level group in Brussels.
Lord Clinton-Davis: I support the observations made by my noble friend Lord Brett. I also support the observations made by my noble friend Lord Lea about Europe, but that is a feast yet to savour. I want to comment briefly on why the Government do not support the amendment. It seems to me self-evident that they should encourage employees to assert themselves to play a full participatory role on the board following the design which they have created.
There should be an employee representing the employee share trust on the board of NATS. That is the view of the IPMS and it is a view which I share. I do so because of my previous interest as an aviation Minister. I want to encourage the widest possible involvement in the decisions which are taken by the new board and the amendment is a way of doing so.
I do not say that we have necessarily achieved the wording that is most acceptable to the Government but the principle is clear. It should be acceptable to the Government because they ought to be involved on the board not only as regards their position but also that of the employees. They should be anxious to ensure that employees have a voice on the board. I believe that the amendment does that.
It is very important that employees' wider safety concerns are considered at the highest level. No one but the board member who represents the employees is in a position to understand that from a day-to-day point of view. It seems to me that no one else could, without a conflict of interest, fulfil that role in a way that is acceptable to the employees.
I believe that, along with the TUC, a trustee board member who is independent of government would represent the employees' interests most satisfactorily. However, that is a matter of detail; it is a matter with which we can come to terms only when the Government have accepted the idea in principle. I plead with my noble friend to accept the need for this role. He should ensure that the idea which he represents is understood by the workforce. That is the only way of doing it. There is no other avenue that he can explore satisfactorily. Therefore, I support my noble friends in what they propose. I shall happily ensure that my noble friend who is the chairman of our party follows me.
Lord Hoyle: My noble friends have said nearly all that can be said on this matter. We are concerned that the Government seem to have passed over all operational control to the private partner; indeed, the private partner will appoint all the executive directors. That is an attempt to get the Government to punch their weight in relation to the shareholding that they have in the company. We believe that directors should be appointed, in accordance with the shareholding, by the Government to the board. In that way, there would be a real public/private partnership and that is what we want to see.

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There should be an employee representative; that is, someone in whom the employees have full confidence. There have been, and still are, many misgivings about the setting up of the PPP. One way of overcoming those misgivings would be, as my noble friends have said, to enable the employees to feel that they have direct representation on the board through their nominee. I am sure that that would ease many of the difficulties that may arise or suspicions that may linger within the workforce. As my noble friend said, an employee representative—not a representative of the employers or of government, but someone who represents employees—would be extremely beneficial. I ask the Minister to accept what we are trying to achieve with Amendment No. 85.
Baroness Thomas of Walliswood: I rise to say briefly that I find the amendments very interesting. I do not know whether the 5 per cent or 10 per cent threshold is an immutable obstacle to what noble Lords are trying to achieve. I believe it is the case that under some company constitutions there can be special categories of voters who vote a particular employee on to a board. Perhaps that is the type of approach that one would be able to take in this case. In any event, I look forward to hearing the Minister's response and I hope that he will treat this idea with some sympathy.
Lord Brabazon of Tara: I, too, look forward to the Minister's response. I am curious as to how employees will benefit from their 5 per cent shareholding in the company. As I understand it, the shares will not be traded. Will there be a dividend? If so, how will that work? Will it be divided up among all the employees?
9.30 p.m.
Lord Macdonald of Tradeston: I am grateful for the contributions that we have heard, particularly from my noble friend Lord Brett, who has unmatched experience on the subject, as well as the constructive contribution of my noble friend Lord Lea of Crondall, who set the debate in the European context and referred to the changes that we anticipate.
I shall deal with the four objectives of the new clause in turn. The first is on voting rights. The Government have always made it clear that the strategic partner will have voting and operational control of NATS, except in relation to certain key areas where the approval of the government-appointed directors or in some cases the Secretary of State will be required. Obliging the Government to retain voting rights equivalent to their proportionate shareholding in NATS would effectively deprive the strategic partner of voting control of NATS, as its share of votes would be less than that of the Government. That would jeopardise NATS' private sector classification, which would ultimately deny it access to private sector capital, which is one of the key objectives of the PPP. In addition, the inability to give the strategic partner voting control would undermine its confidence in its investment. That could dissuade potential strategic partners from participating in the PPP process and eliminate some potentially attractive candidates,
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thereby reducing what the Government, and ultimately the taxpayer, receive for the NATS shares that we sell.
The second objective is to ensure the Government can always appoint a proportionate number of directors to the NATS board. That would deprive the strategic partner of board control, thereby again placing NATS' private sector classification at risk and rendering an investment in NATS unattractive to potential strategic partners. Furthermore, it would most likely result in the Government and the strategic partner having an equal number of directors, creating the potential for deadlocks at board level. That would jeopardise not only NATS' commercial future but its ability to put in place the systems and procedures that we think are necessary to guarantee the ongoing provision of safe air traffic services.
The third objective is to ensure that 5 per cent of NATS' share capital is held by an employee share trust. I hear what the noble Baroness, Lady Thomas of Walliswood, says. We are too far down the road to change the 5 per cent total. However, we are in discussion with trade unions about how that 5 per cent might be deployed and what the conditions might be. The noble Lord, Lord Brabazon of Tara, asked how it will be valued. Normally in such cases an internal market can be set up to allow values to be ascribed to the shares. The starting value will depend on the price that we get for the 46 per cent that we sell. The final details will have to be worked out in consultation with the strategic partner.
The Government have always made it clear that employees will be entitled to participate in NATS through that holding of the ordinary share capital. That policy has not changed. It is inappropriate to attempt to prescribe the details of a complex employee share participation arrangement in primary legislation. The amendment would require the shares to be owned, both legally and beneficially, by the employee share trust. That might deprive employees of the full benefit of the shares.
Finally, this new clause seeks to secure employee representation on the board of NATS. That is going a step too far. It would be highly unusual for a major UK company to have employee representation on its board, particularly in the case of a company which is intended to be operated along the lines of a listed company.
I speak as someone who has been a shop steward of two trade unions and a chairman of two public limited companies. In neither of those roles should I have been at all happy with the conflicts of interest which may arise: a board member has fiduciary duties in that capacity and yet there are the expectations of colleagues who have elected him into that position.
Lord Clinton-Davis: There are companies, are there not, in which the workers are represented not by an individual who is a member of the trade union

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concerned but independently? That being so, all I ask is that there should be an independent voice to represent the workforce.
Lord Macdonald of Tradeston: As ever, my noble friend is ahead of me. Both he and my noble friend Lord Hoyle are moving me in a direction in which I am extremely pleased to go. I believe that an employee representative would face a conflict of interest between the protection of the rights of employees and the best interests of the company. That might create tensions at both levels and would hamper the effect of management of the company and increase the risk of deadlock.
If the Government and the strategic partner had an equal number of directors, the employee representative would hold the balance of power, which would give employees an undue influence in the company with a share of only 5 per cent.
But we have not forgotten the position of employees. A stakeholder council is to be created which will be an influential body. Its views will carry considerable weight. More important, it will allow representatives of NATS' employees and users of aviation—
Lord Hoyle: Surely, that will only be a consultative body, will it not? How often will it meet? As I remember, on Second Reading I described it as a watchdog which not only did not bite but which hardly barked.
Lord Macdonald of Tradeston: I do not share my noble friend's cynicism on that point. It will be an effective body which will meet about twice a year. It will have a broad membership. It will carry weight because it will be made up of representatives of NATS' employees and users of aviation. It will provide access to direct involvement in the company. It will offer a forum for discussion and will influence NATS' plans and arrangements for the provision of air traffic services. It will offer the opportunity for any member of the council to raise an issue regarding the provision of those services by NATS and its subsidiary or for those issues to come to resolution.
The council will pay particular attention to areas such as major investment projects, safety issues, standards of service provision, long-term investment plans and the development of new technology. Those are all on the agenda for the stakeholders council.
However, we recognise that the area of employee representation is important. Having listened to what has been said, the Government are prepared to strengthen their arrangements. The Government will have the right to appoint two, or perhaps three, partnership directors to the board of the PPP company. They will have the right also to appoint a trustee to the employees share trust. So we are proposing that we should consult staff representatives about the criteria that we shall use in selecting those appointees so that the staff can feel comfortable about those appointments. We propose also that the
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government trustee be appointed as one of the partnership directors. That person, although bound by the rules of both appointments, would be uniquely informed on matters of interest to staff.
I hope that noble Lords will agree that these measures, together with staff representation on the stakeholder council, as already referred to, will provide sensible working arrangements that will be of benefit to all parties involved.
These matters are essentially for the partnership documentation, and that is where I undertake to place them. They would, however, be out of place on the face of the Bill. In view of the reassurances I have given, I hope that the noble Lord will withdraw his amendment.
Lord Clinton-Davis: Will we have the amendments, not only with regard to the stakeholder committee but with regard to the board, before Third Reading?
Lord Macdonald of Tradeston: I suggested that they should be put within the partnership documentation, and that is where I shall endeavour to place them. We shall try to ensure that our partnership directors have direct roles. I refer not only to the trustee and employees' share scheme, but to direct involvement in the stakeholder council and, indeed, the safety committees that we propose them to attend.
Lord Brett: I thank the Minister for his response, which, in some ways, is a curate's egg. He demurs at a representation on the board and says that that is highly unusual in a joint stock or public company. The truth is that this will be a highly unusual company. It is not normal to sell off 46 per cent of shares and give controlling interest to the person who buys them.
I am slightly confused as to how the private sector status could be in jeopardy if the majority of shares, the 46 per cent plus the five per cent of staff shares, are clearly not owned by a public body, namely, the Government. We shall look carefully at that aspect when we read Hansard tomorrow and perhaps return to it at a later stage.
I am pleased to hear the Minister's contribution as regards the second point; that is, how better to represent the interests of staff at board level in whatever form. I am prepared to accept that if an agreement can be reached which is satisfactory to the staff representatives in the discussion that he indicated will take place, and they are content with the proposed format, I certainly would be content. My only immediate response is that having someone who is a trustee and on the board might involve a potential conflict of interest. However, that can be discussed in detail. I welcome the movement the Minister has made in that regard.
I refer to the question of whether the provision is on the face of the Bill or in the strategic partnership agreement. I believe that it is more important to have a form of representation in which the staff will have confidence. I would have no great objection if that

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happens and the provision appears in the strategic partnership agreement. With those caveats, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 52 [Loans]:
[Amendment No. 86 not moved.]
Clause 52 agreed to.
Clause 53 [Guarantees]:
[Amendments Nos. 87 to 89 not moved.]
Clause 53 agreed to.
Clause 54 [Grants]:
[Amendment No. 90 not moved.]
Clause 54 agreed to.
Clause 55 agreed to.
Clause 56 [Shadow directors]:
[Amendment No. 91 not moved.]
Clause 56 agreed to.
Clause 57 [Extinguishment of liabilities]:
[Amendment No. 92 not moved.]
Clause 57 agreed to.
Clauses 58 to 61 agreed to.
Clause 62 [Exercise of functions through nominees]:
[Amendments Nos. 93 and 94 not moved.]
Clause 62 agreed to.
Clause 63 agreed to.
Schedule 6 agreed to.
Clause 64 agreed to.
9.45 p.m.
Baroness Thomas of Walliswood Baroness Thomas of Walliswood moved Amendment No. 95:
After Clause 64, insert the following new clause—
CIVIL AVIATION AUTHORITY PENSION SCHEME
(" .—(1) NATS or any transferee company will be a non-associate member of the Civil Aviation Authority Pension Scheme (CAAPS).
(2) Payments by NATS or any tranferee company into CAAPS will be at the rate agreed between the participating employers, the CAA, Highlands and Islands Airports Ltd (HIAL), NATS and the CAAPS trustees following advice from the scheme actuary.
(3) The strategic partner shall make provision for increases in pensions and capital sums to which this section applies to each increase in official pensions under the Pensions (Increase) Act 1971 and section 59 of the Social Security Pensions Act 1975 ("an official pensions increase").
(4) This section applies to a pension or capital sum at any time if—

(a) at that time it is a pension in payment, a deferred pension or capital sum or a pension or capital sum to which a person's future entitlement is contingent on the death of another person, and

(b) the CAA either made provision for an increase in it broadly corresponding to an official pensions increase or would have done so if it had been within paragraph (a) at a time when the CAA made provision for increases broadly corresponding to an official pensions increase.

(5) But where it was the practice of the CAA, when making increases broadly corresponding to an official pensions increase, in any circumstances—

(a) not to make provision for an increase, or

(b) to make provision for an increase of a reduced amount,

subsection (1) does not require NATS to make in similar circumstances provision for an increase in excess of any for which the CAA would have made provision.").
The noble Baroness said: Amendment No. 95 seeks to protect the pension rights of NATS employees. Since we tabled this amendment, a more detailed amendment with a slightly different emphasis has been tabled by the noble Lord, Lord Brett, and his noble friends. To be perfectly frank, I am not prepared to argue my amendment against theirs. We felt that this was the right way to go about this. On the other hand, there may be better ways.
The principle in the detail is probably more important than either amendment; and the principle is that those people who transfer to the new company should retain the same pension rights as they would have had if they had remained with NATS. That is such a simple principle to express that I shall leave the matter there and allow the noble Lord, Lord Brett, to give a more lengthy exposition of his much longer amendment. I beg to move.
Lord Brett: It may be appropriate for me to speak now to Amendment No. 96 in my name and that of my noble friends. I am at one with the noble Baroness, Lady Thomas, in believing that the wording of amendments concerning pensions issues are fraught. The advice that we received did not come without some expense; it was prepared by experts in the field.
Essentially, I am sure that Amendments Nos. 95 and 96 aim at precisely the same end. I believe also that Ministers aim for the same target. The question is whether there are sufficient guarantees in the verbal assurances so far given to sustain us over the years when the debate is long forgotten, when the PPP has long prospered, and we have entered what I may call "Faulkner's world"—the ever-changing situation in Europe which could be quite different in five years' time with quite a different growth of air traffic control centres. They may then be fewer in number, greater in size and scope but with a smaller number of employers.
Basically, the one thing above everything else about which the staff of NATS are concerned is the potential impact of privatisation on their pensions. Employees of NATS are currently members of the CAA scheme. The Government have assured us that if the PPP goes ahead, the NATS PPP could continue to participate in the scheme as a "non-associate" employer. Existing employees of NATS could then remain in the CAA pension scheme. However, many of the obligations to finance the scheme will pass to the strategic partner and we do not believe that the Government's assurances, however well meant, are sufficient. They do not offer sufficient protection and that is why we believe—this is a fundamental confidence-builder for staff—that such protection should be on the face of the Bill.

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We obtained expert advice on this matter. That is why the amendment is long and detailed. But it is designed to deal with several simple tasks. When NATS becomes a PPP, it is important to ensure that sufficient funds are segregated within the Civil Aviation Authority pension scheme to reflect liabilities—new subsection (3). Incidentally, the trustees of the new pension scheme are so anxious to have that provision included in the Bill that, if it is not, they will test the position at law. We also want to ensure that NATS employees can remain in the CAA scheme even after the subsequent transfer—new subsection (4).
At least one representative from the employees and one from the employers should be represented on the board of the CAA pension scheme, in accordance with new subsection (8). But the new NATS PPP employer, or anyone thereafter, must contribute to the scheme to a level to protect the accrued rights and guaranteed benefits on winding up; not simply at the level required by the minimum funding requirements, as specified in new subsections (9) to (11).
The new NATS employer, or any future employer—we know dilution is on the cards and there could be, if not a change of ownership, certainly a spread of ownership with perhaps new participating shareholders with different ideas from those in the shareholders' minds at the start of the PPP—shall provide future benefits at least as good as those available in the CAA pension scheme at the transfer date, in accordance with new subsection (12). Finally, new subsection (13) seeks to ensure that no amendment may be made to the scheme which would result in a reduction of the accrued or future rights of protected beneficiaries.
We have tested with the same legal advice the assurances given to the trade unions by the Minister. They believe that it will not be sufficient to rely on those assurances, not through lack of good will, but simply because we cannot guarantee the future.
It is true that the amendments to the CAA pension scheme—the protectors—are quite strong. However, this is not the case when you consider the contribution rate payable. Contributions are covered under the relevant clause where reference is made to the schedule of contribution as it is expressly stated (as it has to be legally),
"as agreed between the trustees and the company".
Therefore, the trustees do not have unilateral rights to set the contribution rate. Of course, you could take it to the extreme, as I mentioned earlier. You could find an attempt to push the funding rate down to the minimum requirement rather than, as we would like to see, a level of funding that would cover the full buy-out of any benefits if the scheme were to be wound up tomorrow. Further, even if it is contained within a strategic partnership agreement, we do not know how long that agreement would remain inviolate when there is a fair chance of dilution. Therefore, we do not know how relevant that agreement will be in a number of years time.
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There has recently been correspondence with the trustees of the CAA pension scheme. They are very concerned to ensure that anything covering pensions should be included in the Bill. Any agreement that imposes a contractual commitment on the PPP would not bind the trustees because they are not party to it. Therefore, provision in the Bill would make it far easier for the trustees to ensure that the necessary safeguards were observed.
What we propose is not revolutionary; it is not without precedent; and, indeed, it is not new. In fact, it may be familiar to noble Lords on the opposite side of the Committee. It has been taken from the privatisation of electricity supply, which took place a decade ago. It is not even new or a precedent within this piece of legislation, because it has been found possible, necessary and agreeable to include the London Underground on the face of the Bill. I return to the comment of my noble friend Lord Whitty that the staff are crucial to the future of NATS, with which we agree.
It would not be possible to explain to NATS staff why the Government say that it is unnecessary to have on the face of the Bill protection of their pensions, despite the fact that the legal advice and the trustees of the pension schemes to which they currently belong wish to see it. It would be difficult to explain to them why it is possible to put in the same Bill the protection of the pensions of London Underground staff. There may be slight differences in that respect, but they are not sufficient to suggest different treatment. I hope, therefore, that Members of the Committee will feel able to support this amendment and that the Minister will be able to accept our proposal to protect the pensions of staff transferring to the PPP. I beg to move.
Lord Brabazon of Tara: Perhaps I may presume to give the Minister a little advice on the matter. I sat through the proceedings on many privatisation Bills during the time of the previous government. As the noble Lord, Lord Brett, said, pensions were an issue in every one of them. We always had to give way on pensions at the end of the day. Moreover, I believe that we nearly always had to do so in this Chamber. Therefore, in order to save the Minister and the Committee a lot of time, I urge the noble Lord to take that advice.
Lord Brooke of Alverthorpe: I shall be brief at this time of night. On behalf of noble Lords on this side of the Committee, I was most grateful to hear those few words of support from the noble Lord, Lord Brabazon. In my previous incarnation as General Secretary of a Civil Service union, I had some experience of dealing with strategic partnerships, and forms of privatisation. Now we have PPPs. Invariably we run into two major issues. This is understandable with the transfer of staff. The first issue is that of job security. It is difficult to get the kind of long-term guarantees and security that staff want when they are being moved in that way.

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The second major issue is invariably pensions. Public servants enter into employment with the public service with an expectation of what their pensions will be. They contribute indirectly towards their pension during the course of their careers and, no matter what happens, they expect—and they have a right to do so— that that will go with them throughout the rest of their working lives.
Every time that we have a privatisation, or a PPP, we run into this kind of difficulty. Although there are clearly problems as regards job security and certainly on pensions, I hope that the Labour Government will listen sympathetically to these proposals. I join my noble friend Lord Brett and the noble Lord, Lord Brabazon, in urging the Government to seek a more sensible and civilised way forward. If the Treasury constitutes the obstacle, it should have been required to propose an alternative mechanism which avoids this conflict which always arises when such partnerships are proposed. I again urge that the Treasury should be asked to propose a measure which is novel, innovative and which protects pensions without the need for an argument about whether it should be on the face of the Bill or in the partnership documents. I hope that the Minister will consider that point.
In the meantime, a group of staff are extremely concerned about their future. I am sure that the Government will say that there is no difference between what they are offering and what the staff want. There are alternative and innovative proposals to be explored but, if there is not time for that, the appropriate measure should be included on the face of the Bill. I hope that this matter will be addressed in a sensible way. In the words of the noble Lord, Lord Brett, a confidence builder is needed so that staff work together to make a success of the change that is proposed.
Lord Hoyle: It is not often that I urge my noble friend to take the advice that has been proffered from the Benches opposite. However, in this case I hope that he will. As has been rightly said, the staff are extremely concerned about job security and about their pensions. An appropriate pensions measure would build up their confidence. Ministers have given verbal assurances on this matter which have pleased the unions. However, we are trying to put some rock solid foundations into those verbal assurances. Reference has been made to the electricity privatisation. We ask that similar provision be made for NATS employees in this regard. That has been done with regard to London Transport staff. It may be inconvenient but I urge my noble friends to resubmit the matter to the Treasury and include an appropriate measure on the face of the Bill.
Lord Clinton-Davis: I support what my noble friends have said. I do not want there to be a disparity of any real strength between the pilots and NATS employees. I speak uncharacteristically briefly but that is all I want to say.
Lord McIntosh of Haringey: The noble Lord, Lord Brabazon, invites me to give way gracefully and
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quickly for fear that I may have to give way less gracefully and less quickly later. However, I do not see that as my role. I do not see myself, in responding to the amendment, as resisting or giving way, nor do I do see myself as giving verbal assurances, according to the phrase that has been used. In responding to the amendment I seek to show that the concerns which my noble friends have about the pension scheme are not justified. I seek to show that not through verbal assurances but through detailed exposition of the position in which we find ourselves.
At present, pensions for NATS employees, and also Civil Aviation Authority employees, are provided by the Civil Aviation Authority Pension Scheme (CAAPS). After the PPP, CAAPS will remain the source of pensions for staff employed by NATS at the time of the PPP, but there will need to be some amendment to CAAPS to reflect the requirements of the Pension Scheme Office of the Inland Revenue. The Pension Scheme Office permits groups of companies to participate within the same pension scheme on either an associated or non-associated basis. At the moment the CAA and NATS are associated employers, while Highlands and Islands Airports Ltd is a non-associated employer within CAAPS.
In technical terms, all that will happen is that the principle of non-association is to be extended to NATS to comply with the requirements of the Inland Revenue. What does that mean in practice? Where the Inland Revenue requires the relationship to be one of non-association, cross-subsidy is not permitted—in other words, the concerns of the noble Lord, Lord Brett, about sufficient funds are met. The assets must be separately identifiable. Employer contribution rates must be set by reference to the characteristics of each of the non-associated employers considered separately. No other changes are required by the change of status of NATS from associated to non-associated employer. In particular, nothing about that change of status requires any change to the benefit structures of what, following public/private partnership, will be the separate CAA and NATS sections of CAAPS.
The mechanics to achieve non-association can be dealt with within the existing trust deed and rules of CAAPS and therefore without the requirement for legislation. I shall refer to that in detail as I deal with each of the parts of Amendment No. 96. If that were not so, it would not have been possible to change the status of the Highlands and Islands Airports Ltd. from associated to non-associated employer some years ago.
It also follows from this that the current obligation under the CAAPS trust deed and rules to increase pensions in line with the Retail Prices Index will continue to apply to both the CAA and NATS sections. Furthermore, the deed contains a very restrictive power of amendment. There is, therefore, no realistic prospect of the benefits, including index-linked pension increases, being reduced after PPP for staff in employment with NATS at the time of the PPP.

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Therefore, I can assure the Committee that current NATS employees will remain members of the Civil Aviation Authority Pension Scheme and the new private sector partnership will be obliged to continue as a continuing condition of the partnership. That condition is an essential part of the deal and will be written into the strategic partnership agreement.
Amendment No. 96 is based on a misunderstanding of the current and proposed arrangements relating to CAAPS. To accept the amended clause as proposed would be unnecessarily to burden the PPP with a bureaucratic framework duplicating existing and proposed protective arrangements which are achieved by the existing trust deed and rules with its unusually restrictive power of amendment; the general protection provided by the statutory pension framework, especially the Pensions Act 1995, and the relevant provisions in the strategic partnership agreement.
Perhaps I may turn to the details of Amendment No. 96. The noble Baroness, Lady Thomas, will forgive me but I shall not spend any time on Amendment No. 95 because of the manner in which she moved that amendment. I turn to the definition in the proposed new subsection (1) of protected beneficiary. Paragraph (b) could be thought to be overly protective given the use of the class. Paragraph (c) is implied in any event and (d) and (e) are unaffected by the PPP and remain in the CAA section of CAAPS.
The proposed new subsection (2) is not required because that will happen in any event and requires no special provision. Subsection (3) is also unnecessary: the trust deeds of CAAPS have a fiduciary duty when considering the allocation of assets between the various sections of CAAPS or on the transfer to another scheme. Subsection (4) will become unnecessary once CAAPS becomes a non-associated scheme. There is no doubt that non-association can be achieved. CAAPS is already non-associated in respect of Highlands and Islands Airports Ltd.
A company described in subsection (5) under non-association should be able to participate in the NATS section or, if necessary, a separate section within that. What I said about subsection (3) also applies to subsection (6). As regards subsection (7), once the scheme is non-associated, an employer with no connection with the NATS business could become a participating employer. The protection should not extend to somebody who moves to a quite different job. Under subsection (8) a provision of this kind may sit uneasily with the statutory provisions for member nominated trustees as required by the Pensions Act 1995.
On subsection (9), a very prescriptive contribution rate may well prove inappropriate in practice. Subsection (10) would impose on the relevant NATS employer a greater obligation than the existing sophisticated statutory framework relating to the preservation of pensions or under the existing trust deed of CAAPS. With regard to subsection (11), a
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provision of this type would fetter the discretion of the trustees of CAAPS to an unacceptable degree. On subsection (12), the CAAPS deed already provides for this; and subsection (13) simply duplicates the existing terms of the CAAPS trust deed.
I am not expecting my noble friends to be content with every part of that explanation, but I hope it is clear that we have considered every single issue in these complicated amendments.
I have been asked about the comparison with the railways or London Underground. The position in regard to London Underground and the railways is much more complex. The Government made provision for statutory protection of London Underground staff because we expected a restructuring of the business. We expected it then— and we still expect it—to be much more complex than will be the case with NATS. Experience of Railtrack privatisation suggests that many of the staff transferring to the PPP Infracos will be subcontracted early on—possibly several times—and be subject to mergers within the "mainstream" railway industry.
It might have been possible to have ensured that London Underground staff were adequately protected using a contractual mechanism of the kind proposed for NATS, but since the employers on whom the obligation to participate in the pension scheme would be laid might be at several levels of remove following this multiple subcontracting and reorganisation, we felt that such a contractual obligation would be difficult to enforce. That is certainly not the case here.
Noble Lords on all sides of the Committee regard pension provision as an important issue. The Government have not taken any of these decisions lightly. If my noble friends still have concerns, I have a duty to reflect further on the points made and to discuss the issues with them between now and a later stage. On the perceived need for legislative protection for NATS staff, if after discussion it is agreed between us that there is a case for coming back to the issue at a later stage of the Bill, I am of course prepared to do that.
Lord Brett: I thank the Minister for his detailed response. He is better at "Treasuryspeak" than anyone else I know. But it is "Treasuryspeak". I am grateful only for his final two sentences; they at least offer the opportunity for further consideration. The difficulty is that even if everything the Minister said is absolutely true, it is not believed by those most affected. They are not prepared to accept that a Minister in the year 2000–01 will give assurances which in 2006 may see a strategic partnership agreement torn up, changed; Faulkner's world will have arrived and we will have a whole different series of ownerships—not only within London Transport but, with dilution, we could have it within the strategic partnership.
Lord McIntosh of Haringey: I have not made myself clear. I am not talking about assurances that I have given; I am talking about a trust deed which is the responsibility of the Civil Aviation Authority pension scheme. It is not open to any new management of

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NATS to change it; it is up to the Civil Aviation Authority pension scheme trustees—and they will be in the future as they are now. These are not assurances; these are facts.
Lord Swinfen: Surely the noble Lord is aware that trust deeds can be changed.
Lord McIntosh of Haringey: The trust deed will be in the same hands as it is now.
Lord Swinfen: But that does not mean that it cannot be changed.
Lord Brett: There are two points: one is the contributions that will be made by the strategic partner; the second point—which is of greater substance—is that the very trustees in whom we are placing faith because of the facts presented by the Minister are the people who want to see it on the face of the Bill. That somewhat undermines the verbal assurances—facts or otherwise—in the minds of the 5,000 people that we need to make a success of a novel PPP. I shall happily take the opportunity, first, to read Hansard; secondly, to consult my ex-colleagues in the NATS area; and, thirdly, to take up discussions on this issue with the Minister before Report stage. However, on the basis of the robust answers this evening, I feel that, unless the issue can be resolved in the meantime, it will have to be put to a Division at Report stage.
Baroness Thomas of Walliswood: I was extremely interested to hear the most recent intervention of the noble Lord, Lord Brett, because it embodied, in great detail and with great fervour, some of the doubts that were creeping into my mind as I listened to the Minister. I understood what he was saying—at least I think I understood it—about the trust deed. I still do not see why that prohibits any mention on the face of the Bill of employees' pension rights. I shall withdraw my amendment for the time being, but I shall be extremely interested to see the results of the conferencing between the Minister and his colleagues.
Lord McIntosh of Haringey: The noble Baroness, Lady Thomas, will be very welcome.
Baroness Thomas of Walliswood: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 96 not moved.]
Schedule 7 agreed to.
Clause 65 [Interpretation]:
[Amendments Nos. 97 and 98 not moved.]
Clause 65 agreed to.
Clause 66 [Air navigation: directions]:
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 99:
Page 44, line 6, leave out subsection (2).
The noble Lord said: In moving Amendment No. 99, I should like to speak also to Amendments Nos. 100 and 103. Amendment No. 99 seeks to leave out subsection
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(2) of Clause 66. Subsection (2) deprives anyone injured by the CAA's failure to carry out any duty imposed on it by the Secretary of State of any right of action against the CAA. The amendment seeks to restore such a right of action. It is a basic right that those injured by the failures of a public body should be compensated. If the Secretary of State considers a matter important enough to give a direction, it is important enough for those injured by the CAA's failure to comply to have a remedy. It is in any event difficult to see the difference between failure to carry out a duty and an act of omission in the course of performing navigation functions.
Amendment No. 100 seeks to amend Clause 68. Clause 67 already gives the Secretary of State power to give directions to the CAA in relation to its air navigation functions. Subsections (2)(a) and (b) go further in allowing him to require in those directions that the CAA comes back to the Secretary of State for further directions. The amendment removes that further right. These additional powers give too much control. Once the Secretary of State has told the CAA how it is to exercise its air navigation functions, he should leave the CAA to get on with it and not give himself—the Secretary of State—the power to interfere in this way.
The final amendment in this group, Amendment No. 103, seeks to amend Clause 71. Clause 67 gives the CAA a wide-ranging power to require production of information and documents from those providing air traffic services, whether they are licence holders and therefore subject to regulation by the CAA or not. The amendment exempts commercially confidential or price-sensitive information. Providers of services should not be forced to provide information which could afford competitors an unfair advantage if it fell into their hands. The exemptions in subsection (3) do not give sufficient protection. It will sometimes be fair to compel production of information or documents in the context of legal action, which in most cases will either have been instituted by the provider or against it as a result of default by the provider, but it would not be fair to do so at the instance of a public body where there has been no default by the provider. I beg to move.
10.15 p.m.
Lord Macdonald of Tradeston: Amendment No. 99 seeks to remove Clause 66(2) which provides that, should the CAA fail to perform a duty placed on it by a direction issued under Clause 66(1), it is not liable to suit. This reflects the current provision in Section 72(3) of the Civil Aviation Act 1982.
While a direction may place a duty on the CAA, and Clause 103(1) requires that the CAA must give effect. to that direction, it will remain with the CAA to decide how best to implement that duty. In such circumstances, it is not too hard to imagine a situation where the CAA could take a course of action which, while satisfactory to the Secretary of State, could be perceived by an individual or organisation as failing to meet that duty. Clearly it would be undesirable for the

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CAA to be at risk of legal action each time it took policy decisions in response to directions it has received from the Secretary of State.
Amendment No. 100 seeks to remove the ability of the Secretary of State to require the CAA to seek the approval of the Secretary of State on any specified matters or in any specified circumstances.
We are uncomfortable with the idea of removing lines 4 to 9 of Clause 68. We do expect to replace the current directions to the CAA in respect of airspace policy. These require that in certain specific circumstances the CAA must consult with, and obtain the approval of, the Secretary of State. We do foresee a continuing requirement for the involvement of the Secretary of State.
It is clearly essential that the CAA should have access to the information it requires to enable it properly to carry out its air navigation functions. Amendment No. 103 would prevent the CAA requiring the supply of information for this important purpose where such information is commercially confidential or price sensitive.
The clause as drafted means that no one can be compelled to produce documents or to supply information which he could not be compelled to produce in civil court proceedings. I am sure that the Committee will agree that that is as it should be. However, aside from that, the CAA should have access to the information it needs, which may well include information falling within the two categories specified in this amendment. We do not believe that it should be unnecessarily hampered in its exercise of statutory functions and duties. It is for this reason that we do not believe the amendment to be appropriate or acceptable.
In the circumstances, I invite the noble Lord to withdraw his amendment.
Lord Brabazon of Tara: Once again I am grateful for the Minister's response to what are in essence fairly detailed amendments to the Bill. He has given me some reassurance. As always, I shall look forward to reading what he has said. In the mean time, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 66 agreed to.
Clause 67 agreed to.
Clause 68 [Directions: further provision]:
[Amendment No. 100 not moved.]
Clause 68 agreed to.
Clause 69 agreed to.
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 101:
After Clause 69, insert the following new clause—
PENALTIES FOR DEVIATION FROM APPROVED ROUTES FOR TAKE-OFF OR LANDING
(" . The Secretary of State may make regulations allowing an airport operator to apply penalties to the operators of air services when those services deviate from approved corridors or routes for take-off or landing.").
The noble Lord said: I beg to move Amendment No. 101. I begin my remarks with a quotation:
"We propose to take powers to enable airports to enforce mitigation measures, for example by taking action against noncompliant airlines, and to enable local authorities to enforce noise mitigation agreements".
The quotation continues:
"This will require legislation and we will consult on the details. In the interim, there is nothing to stop airports from entering into noise mitigation agreements with their local authorities".
That is a quotation from paragraph 4.221 of the government White Paper A New Deal for Transport: Better For Everyone published in 1998. Two years later, I believe that we now have the legislative opportunity in the Bill before us to do something about this matter.
This amendment was proposed in another place by my honourable friend Mr Graham Brady MP and a number of other Members of Parliament from all sides of the House with constituencies in the Manchester area. They have held discussions with Ministers. I believe that those Ministers were reasonably in favour of the proposal, but again were looking for an opportunity for legislative time.
When aircraft take off from busy airports, they are expected to follow noise-preferential routes until they reach a certain altitude, and then to go in the direction of their destination. The purpose of that is to mitigate noise problems and to attempt to minimise the area affected by noise.
Section 38(1) of the Civil Aviation Act 1982 provides that,
"an aerodrome authority may for, the purpose of encouraging the use of quieter aircraft and of diminishing inconvenience from aircraft noise, fix its charges by reference, among other things, to any fact or matter relevant to … the extent or nature of any inconvenience resulting from such noise".
The problem is that there is some legal doubt as to whether that allows for the type of measure that I propose.
Perhaps I may again draw on the experience of Manchester airport. Some airlines are very good, and some are very bad. I shall not name names; suffice it to say that over 20 per cent of the aircraft of one airline on the list that I received from Manchester deviate from the NPR. Other examples are given of 15, 16 or 17 per cent deviation from the NPR. That is unacceptable. I sympathise particularly with the airports. Although the aeroplanes make the noise, it is always the airport that gets the blame.
So airports want the power—I do not believe that any responsible airline would object—as was recognised in the White Paper, to enforce some kind of fining mechanism or penalty for airliners that deviate too often from the NPRs.
I have deliberately framed the amendment so as to give the Secretary of State a great deal of flexibility in framing the regulations. I am sure I shall be told that it is incorrectly drafted. I shall probably be told also that I am attempting to insert it at the wrong place in the Bill.
However, this Transport Bill has been a long time coming, and I do not know when there will be another. This idea has been around for over two years, since the White Paper was published. It offers an ideal opportunity to include the power in the new clause. As I said, my proposal would provide the Secretary of State with a good deal of flexibility. I believe it would be welcomed by airports, and not least by those who are resident around them.
Baroness Thomas of Walliswood: We on these Benches view the amendment with a great deal of sympathy. It is extremely difficult for people living near an airport—I take Gatwick as an example—to find the right person to whom to complain, and to remember all the necessary details, such as the exact time the aircraft was overhead and the type of aircraft, in order to make a complaint acceptable and effective. It is difficult for the ordinary citizen to get past first base in this matter. If it is not possible for airport operators who know exactly which aircraft has moved where (because it is all recorded) to fine a company or in some other way to express their displeasure with aircraft that do not keep to the correct corridors, the addition of the new clause would do everyone living around an airport an immense amount of good. People who live in my part of the world, with Gatwick at one end and Heathrow at the other, would be delighted to know that the Government had taken advantage of the passage of the Bill to incorporate this small but valuable reform.
Later in the proceedings on this Bill I shall use the same technique as that adopted by the noble Lord, Lord Brabazon, to try to persuade the Government to implement their own policies. I am delighted to support the noble Lord in his particular endeavour.
Lord Swinfen: I admire the ability of the noble Baroness, Lady Thomas of Walliswood, to identify aircraft. I cannot. I have considerable difficulty in identifying even different makes of cars which are much closer to me than aircraft which make noise. I also have a good deal of sympathy with the amendment moved by my noble friend, not so much because I am particularly troubled by noise but because Manston is becoming an increasingly busy airport. Some of the aircraft that land at that airport are extremely large and heavy and occasionally fly over my house. I admit that it makes a change from the quietness.
I wonder whether my noble friend's amendment should have a little more in it. My noble friend seeks to protect the public from excessive aircraft noise. I appreciate that use of the proper air corridors is a matter of safety. However, aircraft should have a get-out clause if they must deviate because of an emergency, for example the need to take avoiding action because a light aircraft flies into their path and creates a danger or because the presence of a drunken passenger means that they must return in a hurry and
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land. The aircraft operators must have some get-out clause; otherwise, I applaud my noble friend for tabling the amendment.
Lord Berkeley: I also have a good deal of sympathy for the amendment. I intended to refer to the Government's White Paper in connection with a future amendment, but the noble Lord, Lord Brabazon, has beaten me to it. The White Paper makes a good effort to change the policy of the previous government, which was to predict and provide for the roads, until they decided that they could not do any more, and predict but not provide for the railways. However, we are still in the business of predicting and providing for airlines because, somehow, it is economically necessary for London, Manchester or wherever. We must move on a little further, and we shall probably do so in a few years.
I agree that perhaps the amendment should be slightly widened to include those aircraft that make too much noise and otherwise produce undesirable effects, including those times when they deviate. It is up to governments to ensure that airports are seen to be on the side of residents as well as their customers. That will not be possible without some legislation. After all, the amendment is all about whether aircraft obey the law and go where they are told to go. If we disobey the law on the road we are penalised if the police catch us. There is no reason why the same rules should not apply to air travel. I believe it is time that airports, NATS, or whoever is to do it, ensure that airlines which take easy short-cuts—obviously, only one or two do so—obey the law. If they do not comply with the law they should be penalised. It may he necessary for government to introduce some legislation to ensure that that happens.
Lord Macdonald of Tradeston: The Government are committed to ensuring that the environmental effects of aviation, in particular noise nuisance, are properly mitigated. There are already powers for airports to modulate their charges to airlines in relation to noise. Section 38(1) of the Civil Aviation Act 1982 provides that an airport may fix its charges by reference to the amount of noise an aircraft makes or the inconvenience caused by such noise. The Committee will be gratified to hear that many airports levy differential landing charges according to, for example, the comparative noisiness of aircraft types. Airlines and their pilots rarely wilfully stray from the specified routes. Safety, as well as environmental considerations, mean that at major airports, they should follow the stipulated routes and procedures, and the directions of air traffic controllers.
Let me assure all noble Lords who have spoken that the Government are committed in our White Paper on integrated transport to introducing legislation clarifying and enhancing the powers of aerodromes to enforce noise mitigation measures. That commitment stands. We shall be consulting shortly on the details of that legislation and I think that that would be the appropriate time to look at the issue that the noble Lord's amendment raises. In those circumstances I ask noble Lords opposite to withdraw their amendment.
10.30 p.m.
Lord Brabazon of Tara: I am grateful to all noble Lords, including the noble Baroness, Lady Thomas of Walliswood, who took part in the debate and supported what the amendment seeks to provide. My noble friend Lord Swinfen thought that there should be some provision in the amendment to take care of emergency situations. That is why I drafted the amendment flexibly so that the Secretary of State can make regulations and could take into account all the factors to which my noble friend referred.
The noble Lord, Lord Berkeley, said that predict and provide were still the mode of the aviation world. I do not think that many in the industry will agree with him when one considers the length of time the inquiry into a possible terminal 5 at Heathrow is taking, and the never-ending saga of the possible requirement of a new runway somewhere in the South East. I do not intend to enter into that debate today. I do not think that anyone will agree with the noble Lord that predict and provide still continues in the aviation world.
However, I agree with him that airports need to make themselves as environmentally friendly as they can. The amendment is a modest help to them. The Minister is right that airports can and do have differential charges for different categories of aircraft. But that does not directly answer the point I seek to make through the amendment as regards the deviation from the noise preferential route and the possibility of a fine, penalty or some such thing for those who deviate from that route. Some airlines are particularly bad; some are good. There is no reason why those who are bad should not improve their ways and seek to become as good as the best. It is unacceptable that just over one in five flights deviates when other airlines—presumably they operate the same kind of equipment—do so less than 4 per cent to 5 per cent of the time.
The Minister was kind enough to say that the Government still have the issue very much in their minds and referred to consultation and so on. Before withdrawing the amendment, perhaps the Minister can say whether there is any possibility that such consultation might be complete by the time we finish with the Bill in this House—no doubt some time in the spill-over period.
If legislation of the type I have outlined in my amendment is required, when shall we have an opportunity to deal with it? When will the next Transport Bill come along? I do not want the Government to produce another one just for the sake of it, but this has taken three years to arrive. The White Paper was published two years ago. We need to know from the Minister what kind of legislation is required to bring such a measure into force and whether there is time to do so between now and the end of the passage of this Bill through the House.
Lord Macdonald of Tradeston: To be frank, while my information is that we shall be consulting soon on the details of the legislation, I cannot offer a timetable to the noble Lord. However, he has our assurance that
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the commitment to introduce legislation clarifying the powers of aerodromes is on our agenda and we shall consider it at the earliest appropriate time.
Lord Brabazon of Tara: I am disappointed with that reply; it does not get me all that far. I shall not press the amendment tonight but I shall want to return to it at the next stage. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 70 [General duty]:
[Amendment No. 102 not moved.]
Clause 70 agreed to.
Clause 71 [Information for purposes of Chapter III]:
[Amendment No. 103 not moved.]
Clause 71 agreed to.
Clause 72 agreed to.
Clause 73 [Charges for services]:
On Question, Whether Clause 73 shall stand part of the Bill?
Viscount Goschen: My intention in opposing the Question, That Clause 73 shall stand part of the Bill is simple. It is to draw further explanation from the Minister as to how the charging regime will work.
Charges are probably the second most important issue for the customers of NATS. Airlines, the predominant customer base, require two things from their service provider. The first is an efficient, high and safe level of service such as that provided by NATS. NATS has an international reputation as being a high service provider. The second is that those services should be provided at a reasonable cost to the airline industry.
Historically, charges have been recovered from airlines on a clearly understood basis; that of full cost recovery. A brief glance at the report and accounts of the CAA and NATS will show that the intention has been to leave a zero at the bottom line after all the charges have been called in.
That has worked relatively uncontentiously with the airline sector, although I am sure that airlines will always clamour for lower charges. However, they will always want high levels of service, too. We know that the air traffic control industry is capital intensive and that it requires a great deal of technology. I suggest that the Government's continuing experience with the bringing into force of the new air traffic control centre bears witness to that, as does the increasing cost of that centre. However, the arrangements will change with the introduction of this important Bill. It has inevitably raised considerable levels of concern from those who are the customer base of NATS.
When my noble friend Lord Caithness spoke to, I believe, Amendment No. 1, he asked the Minister why he had been advised that he would be unable to sell NATS whereas the Minister, with fast shuffling of feet, had been able to achieve that. The Minister gave the reply that the Eurocontrol convention permitted the

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utilisation of an RPI minus X-type formula approach. I presume that there has been a clarification of or an amendment to the Eurocontrol convention.
None the less, so far as I understand it—and I am open to correction by the Minister—the other signatories still pursue their cost recovery basis. That is not satisfactory under all circumstances because clearly it is up to the service providers themselves to determine what their cost level is, and some would argue that that leads to a degree of inefficiency.
The RPI minus X formulaic approach is of course very well understood. The noble Lord, Lord McIntosh of Haringey, who is charting up his 78th Bill of the year, clearly is well aware, with his handling of the Utilities Bill, of the intricacies of the utility charging process. However, because this is brand new to the air traffic control industry, I should be interested to hear a full explanation from the Minister as to exactly how it will work.
Clause 73 starts with the words,
"The [Civil Aviation Authority] may specify … the amounts of, or methods of calculating, the charges which are to be paid by virtue of this section".
That does not give a great deal of information about how the charging regime will work. I have no doubt that the Minister will refer me to other parts of the Bill that may give further information on the matter. None the less, it is very new to this sector, and I should like to know what guidance the Secretary of State will give to the Civil Aviation Authority as the regulator and what will be the starting points for developing a charging regime.
I also raise the question as to whether there will be benchmarking with other air traffic control authorities within Europe and an assessment of the competitiveness of the new NATS. Therefore, what criteria will be used to establish the charging regime? Will there be a focus on the impact of such charges on national competitiveness? For example, clearly the aviation industry is of considerable importance to the United Kingdom. It is a hub. I believe that the UK handles approximately 40 per cent of trans-Atlantic traffic. Therefore, clearly this is extremely important. It is also probably the case that half of the concerns voiced by the airline industry have been in connection with the charging regime.
Perhaps I may also ask the Minister one or two more specific questions about this clause. Can he give the Committee an assurance that the basis for charging—the understanding of chargeable services—will remain much the same as it is under the existing arrangements?
I turn to Clause 77. I apologise to the Committee and to the Minister for diverging for a moment from Clause 73, but I believe that it is a related point. Clause 77 describes chargeable air services as those services which are not excepted, as in subsection (3). The excepted air services are those which are,
"provided by the owner or manager of an aerodrome or by his employee",
or,
"air traffic services provided on behalf of the owner or manager of an aerodrome".
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In connection with my previous question, I should like to ask the Minister whether the services provided by the military fall under any of those definitions or whether they are understood to be excepted services. A great deal of air traffic control service is provided to aircraft which are in uncontrolled airspace and that service is provided by military air traffic controllers. Aircraft that are not flying in controlled airspace are not currently charged for that service. Will that continue to be the case and will the definitions of what aircraft are charged remain in line with the current arrangements?
In answering my next question, I am sure that the Minister would be entirely correct to tell me to get lost and oppose Clause 80 standing part of the Bill, because the issue appears in that clause, but given the generosity for which he is known, I would appreciate it if he would accept that these are related points. I do not understand Clause 80(1) and (2). They seem to be wishful thinking, although I am sure that the Minister or his advisers will be able to rustle up a clear explanation in seconds.
Clause 80(1) says:
"If information is given to the Secretary of State by the CAA concerning the charges the CAA would like to be paid",
and then goes on to describe them. Subsection (2) says:
"If information is given to the Secretary of State by a licence holder concerning the charges it would like to be paid".
I do not understand what that means. Will the CAA magic up a figure and say, "Ooh, we'd, like to be paid X", while the licence holders say, "Oh no, we'd like to be paid Y"—presumably when Y is a larger figure than X? Perhaps my copy of the Bill is missing something.
That is probably quite enough on charging. I should like the Minister to give the House a full explanation of those important points.
10.45 p.m.
Lord Macdonald of Tradeston: The Bill proposes the minimum necessary changes to the existing arrangements post-PPP. In response to that full set of questions from the noble Viscount, I shall outline the guiding considerations. The legal basis on which NATS charges and recovers for en route Eurocontrol and Shanwick air navigation services should continue to be clear and unambiguous. The UK's international obligations should continue to be met. The existing powers of detention and sale, which enable debts to be enforced and recovered, must remain robust. The Government and the CAA will each retain the appropriate functions, but only those that are required to be carried out in the public sector.
The charging, recovery and enforcement mechanisms will be underpinned by a new obligation in primary legislation in Clause 73 for users to pay the relevant charges. Given such an obligation, it is no longer necessary for the Secretary of State to make regulations specifying the charges payable, as is the case under the 1982 Act. In future, it will be the responsibility of the CAA as regulator to specify all charges, subject to their being within the parameters

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set by Eurocontrol, following proposals made by the licence holder and the CAA, and, where necessary, consistent with the proposed new price controls.
In response to some of the questions that occurred to the noble Viscount late in his speech, I assure him that the military will be exempt and the Bill will not affect the charging position in respect of general aviation. The Secretary of State will set the initial value of X in the RPI-minus-X formula and the CAA will set it in future. The CAA will also set charges. The formula is about the cost and the weight of return from NATS underlying the setting of charges. It will affect the amount of charges for those who have to pay, not the basis on which they are set, who has to pay or factors such as weight, which are currently used. There are no plans for any current exemptions from charges for general aviation to change. The charging arrangements follow Eurocontrol regulations.
The aim of Clause 80(1) and (2) is to put the Secretary of State under an obligation to pass charge notifications to Eurocontrol. It is a protection for the CAA and NATS so that they can be assured of receiving payment.
I assure those Members of the Committee who are committed leisure flyers that the general aviation community is currently exempt from most air traffic control charges. The Bill does not seek to change that. There will be full consultation with air users and other interested parties if at any time in the future there are proposals to remove those exemptions.
Viscount Goschen: I thank the Minister for his response. He clearly has a much better and more economical use of words than I do because he managed to answer my questions in approximately one-third of the time that I took to ask them. He is obviously very skilled in this.
I enjoyed the Minister's explanation of the provisions in Clause 80. I understand what they are there for but I do not understand the reference to what,
"the CAA would like to be paid".
That is an extremely unusual phrase to find a Bill. I do not recall ever seeing any reference to what the Secretary of State would like to be paid or something of that nature.
In the following subsection there is a reference to what the licence holder would like to be paid. Why is there a difference between the two? I do not understand that. I do not expect the noble Lord to answer at this moment but perhaps he will write to me about it.
I was substantially reassured by the various assurances which the Minister gave as regards the subsidiary point of general aviation until the last sentence, when he said that he did not have plans to make any changes at the moment but if he did, he would consult. I found slightly disturbing the admission that he thought about how he would do it, if he wanted to do it, although he does not want to do it. We may need to return to that issue.
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I do not quite understand how the parameters with regard to Eurocontrol would work. There are different systems within Eurocontrol for the charging of different types of service—for example, I understand the French model to be based on full-cost recovery while the UK model is based on RPI-minus-X. Are there one set of parameters for all the air traffic control authorities which are bound by the convention or is a specific set of parameters agreed for each individual service provider? Perhaps the Minister will give me a little more information on that or, if he cannot, perhaps he will write to me. This debate has been extremely useful in clarifying the charging regime. I should be grateful to the Minister if he will respond to those points.
Lord Macdonald of Tradeston: I was not sure whether the noble Viscount was asking a rhetorical question. I shall write to him when I have had the opportunity to read in Hansard the detail of his various questions.
Viscount Goschen: I am grateful to the Minister for that reassurance. In no way were they rhetorical questions. When the Minister and his officials study what I have said, they will see that these are important issues which go to the very heart of the Bill.
On the understanding that the Minister will be taking this matter further, I shall not press my objection.
Clause 73 agreed to.
Clause 74 agreed to.
Clause 75 [Specifications: supplementary]:
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 104:
Page 49, line 16, leave out subsection (7).
The noble Lord said: This amendment is somewhat in the same vein as the question being asked by my noble friend on the Motion that Clause 73 shall stand part of the Bill. I promise not to take more than one minute to move the amendment.
Subsection (7), which we propose to be omitted from the Bill, gives the CAA the power to charge an operator for services that it does not want and does not use, even if, indeed, its aircraft cannot use them. This amendment removes that power. The CAA already has untrammelled power to fix charges. It is not required to limit them to the costs incurred in providing the service or to consult those affected by them before fixing them. Surely it is going too far to charge for services not used, especially where the operators of aircraft are not equipped to use these services. This is neither just nor fair. I propose that this subsection be struck out of the Bill. I beg to move.
Lord Macdonald of Tradeston: The amendment seeks to remove Clause 71(7) which allows the CIA—I am sorry; the CAA—to specify under Clause 73(1), for the purposes of charging, operators and owners of aircraft which do not or could not use the chargeable air traffic services concerned. That reflects the current provision in Section 73(3) of the Civil Aviation Act 1982, which is being repealed.

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The provision seeks to cover the scenario where an aircraft fails to make contact with air traffic control but still enjoys the benefits of services, which are provided in the interests of safety. An example of that is the maintenance of minimum separation distances from other aircraft. This provision also prevents less scrupulous operators obtaining "free rides".
In the circumstances, I hope that noble Lords opposite will understand the purpose of subsection (7). Accordingly, I invite the noble Lord to withdraw the amendment.
Lord Brabazon of Tara: I am grateful to the Minister for his reply. However, I am slightly puzzled as to how, if the aircraft does not identify itself to air traffic control, the charge is levied on it. How do they find out who it was?
A noble Lord: The CIA!
Lord Macdonald of Tradeston: It is a legal requirement for each commercial aircraft to carry a transponder, which is an electronic device that identifies the aircraft automatically to the relevant air traffic controllers. Aircraft of that kind are also required to file flight plans which provide the full range of information required to identify the aircraft.
Lord Brabazon of Tara: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 75 agreed to.
Clauses 76 to 92 agreed to.
Clause 93 [control in time of hostilities etc.]
[Amendments Nos. 105 to 107 not moved.]
Clause 93 agreed to.
Clauses 94 to 96 agreed to.
Schedule 8 agreed to.
Clauses 97 to 101 agreed to.
Schedule 9 [Air traffic: information.]
[Amendment No. 108 not moved.]
Schedule 9 agreed to.
Clauses 102 to 106 agreed to.
Lord Berkeley Lord Berkeley had given notice of his intention to move Amendment No. 109:
Before Clause 107, insert the following new clause—
("DUTIES OF LOCAL TRANSPORT AUTHORITIES

DUTIES OF LOCAL TRANSPORT AUTHORITIES
Each local transport authority shall have a duty—

(a) to promote sustainable transport, including especially all forms of public passenger transport, and the conveyance of freight by rail or water, and

(b) to identify and safeguard such land as may be required for the improvement of transport infrastructure including interchanges between modes.").

The noble Lord said: We are back on the ground, which is a relief for me, at any rate. Amendment No. 109 is designed to encourage—
Lord Brabazon of Tara: Before the noble Lord, Lord Berkeley, continues, I understood that we would finish after the previous amendment and by 11 o'clock. It is now one minute to 11 o'clock. Would it not be better to start on this new part of the Bill on Monday?
Lord Bach: I do not think there was any understanding. However, the Government always want to assist the Opposition as best they possibly can.
I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

London Local Authorities Bill [H.L.]
Returned from the Commons agreed to with amendments; the amendments considered and agreed to.

Local Government Bill [H.L.]
Returned from the Commons agreed to with amendments and with a privilege amendment; the Commons amendments ordered to be printed.
House adjourned at eleven o'clock.

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